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Table of Contents

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 March 31, 2004

 

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 May 6, 2004 the Registrant had 6,959,787 shares of Common Stock, $0.01 Par Value, outstanding.

 

 

Table of Contents

FORM 10-Q

PEDIATRIC SERVICES OF AMERICA, INC.

 

INDEX

 

              

Page
Number

PART I FINANCIAL INFORMATION

    
    

ITEM 1:

    Financial Statements     
          Condensed Consolidated Balance Sheets as of March 31, 2004 and September 30, 2003    3
          Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2004 and 2003    5
          Condensed Consolidated Statements of Cash Flows for the six months ended March 31, 2004 and 2003    6
          Notes to Condensed Consolidated Financial Statements    7
    

ITEM 2:

    Management’s Discussion and Analysis of Financial Condition and Results of Operations    14
    

ITEM 3:

    Quantitative and Qualitative Disclosures about Market Risk    24
    

ITEM 4:

    Controls and Procedures    25

PART II OTHER INFORMATION

    
    

ITEM 1:

    Legal Proceedings    26
    

ITEM 4:

    Submission of Matters to a Vote of Security Holders    26
    

ITEM 6:

    Exhibits and Reports on Form 8-K    27

SIGNATURES

   28

 

Table of Contents

PART I – FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

PEDIATRIC SERVICES OF AMERICA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

    

March 31,

2004

    

September 30,

2003

  
    
     (Unaudited)        

ASSETS

                 

Current assets:

                 

Cash and cash equivalents

    $ 5,291     $ 9,171  

Accounts receivable, less allowances for doubtful accounts of $5,569 and $3,900, respectively

      45,540       37,043  

Prepaid expenses

      2,079       991  

Deferred income taxes

      4,778       4,778  

Workers’ compensation loss fund

      2,950       1,633  

Inventory

      2,224       2,724  

Insurance recoveries

      3,514       2,227  

Other current assets

      243       327  
    
 

Total current assets

      66,619       58,894  

Property and equipment:

                 

Home care equipment held for rental

      31,380       30,009  

Furniture and fixtures

      11,911       11,402  

Vehicles

      505       700  

Leasehold improvements

      2,025       1,961  
    
 
       45,821       44,072  

Accumulated depreciation and amortization

      (36,969 )     (36,343 )
    
 
       8,852       7,729  

Other assets:

                 

Goodwill, less accumulated amortization of approximately $9,613

      36,540       36,540  

Certificates of need, less accumulated amortization of approximately $615 and $604, respectively

      58       69  

Deferred financing fees, less accumulated amortization of approximately $473 and $709, respectively

      890       632  

Deferred income taxes

      2,916       2,916  

Workers’ compensation bond collateral

      2,300       2,779  

Insurance recoveries

      8,594       5,396  

Other

      339       389  
    
 
       51,637       48,721  
    
 

Total assets

    $ 127,108     $ 115,344  
    
 

 

See accompanying notes.

 

3

Table of Contents

PEDIATRIC SERVICES OF AMERICA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS—(Continued)

(In thousands)

 

    

March 31,

2004

    September 30,
2003
     (Unaudited)     

LIABILITIES AND STOCKHOLDERS’ EQUITY

              

Current liabilities:

              

Accounts payable

    $ 8,583    $ 6,045

Accrued compensation

      5,796      5,138

Income taxes payable

      971      1,382

Accrued insurance

      6,901      5,798

Refunds payable

      1,149      1,176

Accrued interest

      947      951

Other accrued liabilities

      2,205      2,062

Deferred revenue

      806      733

Current maturities of long-term obligations

      229      178
    
  

Total current liabilities

      27,587      23,463

Long-term accrued insurance

      14,579      10,302

Long-term obligations, net of current maturities

      20,447      20,515
    
  

Total liabilities

      62,613      54,280

Redeemable preferred stock, $.01 par value, 2,000 shares authorized, no shares issued and outstanding

      —        —  

Stockholders’ equity:

              

Common stock, $.01 par value, 80,000 shares authorized 6,954 and 6,879 shares issued and outstanding at March 31, 2004 and September 30, 2003, respectively

      70      69

Additional paid-in capital

      49,528      49,247

Retained earnings

      14,897      11,748
    
  

Total stockholders’ equity

      64,495      61,064
    
  

Total liabilities and stockholders’ equity

    $ 127,108    $ 115,344
    
  

 

See accompanying notes.

 

4

Table of Contents

PEDIATRIC SERVICES OF AMERICA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

 

    

Three Months Ended

March 31,

    

Six Months Ended

March 31,

  
     2004
     2003
     2004
     2003
  
     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  

Net revenue

    $ 61,033     $ 53,637     $ 120,863     $ 106,199  

Costs and expenses:

                                 

Costs of goods and services

      34,322       29,640       67,618       58,209  

Other operating costs and expenses

                                 

Administrative and marketing salaries, wages and benefits

      10,604       10,169       20,826       20,107  

Business insurance

      2,295       1,736       4,278       3,597  

Overhead

      3,973       3,890       8,145       7,839  
    
 
 
 

Other operating costs and expenses

      16,872       15,795       33,249       31,543  

Corporate, general and administrative

                                 

Salaries, wages and benefits

      3,588       3,369       7,145       6,831  

Business insurance

      43       78       87       167  

Professional services

      634       512       1,154       927  

Overhead

      853       728       1,587       1,450  
    
 
 
 

Corporate, general and administrative

      5,118       4,687       9,973       9,375  

Provision for doubtful accounts

      656       132       2,039       411  

Depreciation and amortization

      914       1,013       1,778       2,073  
    
 
 
 

Total costs and expenses

      57,882       51,267       114,657       101,611  
    
 
 
 

Operating income

      3,151       2,370       6,206       4,588  

Other income

      —         43       4       43  

Early extinguishment of debt

      —         31       —         31  

Interest income

      6       35       49       66  

Interest expense

      (583 )     (620 )     (1,115 )     (1,270 )
    
 
 
 

Income before income tax expense

      2,574       1,859       5,144       3,458  

Income tax expense

      998       731       1,995       1,360  
    
 
 
 

Net income

    $ 1,576     $ 1,128     $ 3,149     $ 2,098  
    
 
 
 

Net income per share data:

                                 

Basic

    $ 0.23     $ 0.16     $ 0.46     $ 0.31  
    
 
 
 

Diluted

    $ 0.21     $ 0.16     $ 0.43     $ 0.30  
    
 
 
 

Weighted average shares outstanding:

                                 

Basic

      6,920       6,858       6,901       6,852  
    
 
 
 

Diluted

      7,430       7,063       7,340       7,071  
    
 
 
 

 

See accompanying notes.

 

5

Table of Contents

PEDIATRIC SERVICES OF AMERICA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

    

Six Months Ended

March 31,

  
     2004
     2003
  
     (Unaudited)