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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 October 31, 2002
----------------
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 0-12927
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NATIONAL HOME HEALTH CARE CORP.
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(Exact name of Registrant as Specified in Its Charter)
Delaware 22-2981141
- -------------------------------- ---------------------------------
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
700 White Plains Road, Scarsdale, 10583
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(Address of Principal Executive Offices with Zip Code)
Registrant's Telephone Number Including Area Code: 914-722-9000
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Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report
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
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the Registrant has filed all documents and
reports required by Section 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 ____No __
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares of common stock outstanding as of December 13, 2002 was
5,560,830.
NATIONAL HOME HEALTH CARE CORP.
FORM 10-Q
FOR THE QUARTER ENDED OCTOBER 31, 2002
PART I. FINANCIAL INFORMATION Page
----
Item 1. Condensed Consolidated Financial Statements:
Balance Sheets as of October 31, 2002 and
July 31, 2002 (unaudited) 3-4
Statements of Operations for the three
months ended October 31, 2002 and October
31, 2001 (unaudited) 5
Statements of Cash Flows for the three
months ended October 31, 2002 and October
31, 2001 (unaudited) 6
Notes to Consolidated Financial Statements 7-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-12
Item 4. Controls and Procedures 12-13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
October 31, 2002 July 31, 2002
---------------- -------------
ASSETS
Current:
Cash and cash equivalents $ 12,808,000 $ 15,341,000
Investments 22,000 35,000
Accounts receivable-less allowance for possible
losses of $662,000 and $691,000 16,871,000 16,382,000
Prepaid expenses and other assets 928,000 778,000
Income taxes receivable -- 234,000
Deferred income taxes 77,000 295,000
---------------- ----------------
Total current assets 30,706,000 33,065,000
Furniture, equipment and leasehold
improvements, net 889,000 857,000
Goodwill 9,054,000 7,366,000
Other intangible assets, net 2,550,000 1,406,000
Deferred income taxes 543,000 515,000
Deposits and other assets 315,000 303,000
---------------- ----------------
TOTAL $ 44,057,000 $ 43,512,000
================ ================
(continued)
-3-
NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
October 31, 2002 July 31, 2002
---------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 2,486,000 $ 3,581,000
Estimated third-party payor settlements 737,000 912,000
Deferred revenue 399,000 340,000
Income taxes payable 317,000 --
------------ ------------
Total current liabilities 3,939,000 4,833,000
------------ ------------
Stockholders' equity:
Common stock, $.001 par value; authorized
20,000,000 shares, issued 6,902,819 shares 7,000 7,000
Additional paid-in capital 25,552,000 25,552,000
Retained earnings 17,313,000 15,839,000
------------ ------------
42,872,000 41,398,000
Less treasury stock (1,333,829 and 1,329,979
shares) at cost (2,754,000) (2,719,000)
------------ ------------
Total stockholders' equity 40,118,000 38,679,000
------------ ------------
TOTAL $ 44,057,000 $ 43,512,000
============ ============
See accompanying notes to consolidated financial statements.
-4-
NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the three months ended October 31,
--------------------------------------
2002 2001
---- ----
Net patient revenue $22,939,000 $20,274,000
----------- -----------
Operating expenses:
Cost of revenue 14,740,000 12,926,000
General and administrative 5,603,000 4,824,000
Amortization of intangibles 140,000 137,000
Provision for possible losses 50,000 115,000
----------- -----------
Total operating expenses 20,533,000 18,002,000
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Income from operations 2,406,000 2,272,000
Other income:
Interest 55,000 78,000
----------- -----------
Income before taxes 2,461,000 2,350,000
Provision for income taxes 987,000 936,000
----------- -----------
Net income $ 1,474,000 $ 1,414,000
=========== ===========
Net income per common share:
Basic $ 0.26 $ 0.26
=========== ===========
Diluted $ 0.26 $ 0.24
=========== ===========
Weighted average number of shares outstanding:
Basic 5,570,779 5,458,579
=========== ===========
Diluted 5,777,343 5,774,459
=========== ===========
See accompanying notes to consolidated financial statements.
-5-
NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the three months ended October 31,
--------------------------------------
2002 2001
---- ----
Cash flows from operating activities:
Net income $ 1,474,000 $ 1,414,000
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 209,000 199,000
Allowance for possible losses, net of writeoffs 29,000 (35,000)
Deferred income taxes 190,000 --
Unrealized loss on investments 13,000 13,000
Tax expense realized from the exercise of stock options by -- 90,000
employees
Changes in assets and liabilities:
Accounts receivable (518,000) 398,000
Prepaid expenses and other (162,000) 363,000
Accounts payable and accrued expenses (1,095,000) (240,000)
Estimated third-party payor settlements (175,000) (266,000)
Income taxes payable 551,000 628,000
Deferred revenue 59,000 (83,000)
------------ ------------
Net cash provided by operating activities 575,000 2,481,000
------------ ------------
Cash flows from investing activities:
Purchase of furniture, equipment and leasehold improvements (50,000) (40,000)
Purchase of assets of business (3,023,000) (85,000)
Other -- (54,000)
------------ ------------
Net cash used in investing activities (3,073,000) (179,000)
------------ ------------
Cash flows from financing activities:
Proceeds from exercise of stock options -- 93,000
Purchase of treasury shares (35,000) (33,000)
------------ ------------
Net cash provided by (used in) financing activities (35,000) 60,000
------------ ------------
Net increase (decrease) in cash and cash equivalents (2,533,000) 2,362,000
Cash and cash equivalents-beginning of period 15,341,000 9,082,000
------------ ------------
Cash and cash equivalents-end of period $ 12,808,000 $ 11,444,000
============ ============
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Taxes $ 246,000 $ 218,000
Interest 5,000 --
See accompanying notes to consolidated financial statements.
-6-
NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month period ended October 31,
2002 are not necessarily indicative of the results that may be expected for the
year ending July 31, 2003. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended July 31, 2002.
NOTE 2 - ACQUISITIONS
On September 3, 2002, the Company, through a newly-formed subsidiary in
Massachusetts acquired certain assets of Medical Resources, Inc. and related
entities ("Medical Resources"). Medical Resources provides home health care
services throughout Massachusetts. The purchase price of $2,623,000 in cash,
including acquisition costs of $73,000, was financed using internal funds. The
acquisition was accounted for as a purchase.
NOTE 3 - RECLASSIFICATIONS
Certain reclassifications have been made in prior years' financial
statements to conform to classifications used in the current period.
-7-
NOTE 4 - NET INCOME PER SHARE DATA
A reconciliation of shares used in calculating basic and diluted net income per
share is as follows:
For the three months ended October 31,
-------------------------------------------------
2002 2001
---- ----
Income Shares Income Shares
Basic EPS:
Net income $1,474,000 5,570,779 $1,414,000 5,458,579
Effect of dilutive securities- -- 206,564 -- 315,880
---------- ---------- ---------- ----------
Diluted EPS: $1,474,000 5,777,343 $1,414,000 5,774,459
========== ========== ========== ==========
-8-
ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion and analysis provides information which the
Company's management believes is relevant to an assessment and understanding of
the Company's results of operations and financial condition. This discussion
should be read in conjunction with the attached consolidated financial
statements and notes thereto, and with the Company's audited financial
statements and notes thereto for the fiscal year ended July 31, 2002.
Except for historical information contained herein, certain matters set
forth in this report are forward-looking statements that are dependent on
certain risks and uncertainties, including such factors, among others, as the
ability of the Company to identify, consummate and integrate on favorable terms
acquisitions or market penetrations, as to which there can be no assurance,
market acceptance, pricing and demand for the Company's services, changing
regulatory environment, changing economic conditions, ability to attract and
retain qualified personnel, ability to manage the Company's growth, and other
risks detailed in the Company's other filings with the Securities and Exchange
Commission.
The Company is subject to significant external factors that could
significantly impact its business, including potential reductions in
reimbursement rates by Medicare, Medicaid and third party payors for the
Company's services, retroactive adjustments due to prior year audits, reviews
and investigations, government fraud and abuse initiatives and other such
factors that are beyond the control of the Company. These factors could cause
future results to differ materially from historical results.
The Balanced Budget Act (the "Act") was signed into law on August 5, 1997.
Under the Act, until October 1, 2000, Medicare certified home health agencies
were reimbursed under the interim payment system ("IPS") for a two-year period
prior to the implementation of a prospective payment system. Under IPS, home
health care providers were reimbursed the lower of (i) their actual costs, (ii)
cost limits based on 105% of median costs of freestanding home health agencies,
or (iii) an agency-specific per patient cost limit, based on 98% of 1994 costs
adjusted for inflation. Prior to the implementation of IPS, Medicare reimbursed
providers on a reasonable cost basis subject to program-imposed cost per visit
limitations. Effective October 1, 2000, under the prospective payment system,
the last remaining phase under the Act, Medicare now reimburses providers a
predetermined base payment. The payment is adjusted for the health condition and
care needs of the beneficiary and is also adjusted for the geographic
differences in wages across the country. Medicare provides home health agencies
with payments for 60-day "episodes of care". The final piece of the Act called
for a 15% cut in Medicare reimbursement effective October 1, 2002. To date, the
change to the prospective payment system has not had a material impact on
reimbursement to the Company; however, there can be no assurance that future
reimbursement under the prospective payment system will not result in reduced
reimbursement rates.
The implementation of IPS resulted in a decrease in Medicare revenue from
the Company's Medicare certified agency. In addition, the Company's operations
in New York and
New Jersey are dependent upon referrals, primarily from Medicare certified home
health care agencies, whose reimbursement had been adversely affected. Under the
prospective payment system, there can be no assurance that the Company's future
referrals will not result in reduced reimbursement rates or reduced volume of
business.
Results of Operations and Effects of Inflation
- ----------------------------------------------
For the three months ended October 31, 2002, net patient revenue increased
$2,665,000, or 13.1%, to $22,939,000 from $20,274,000 for the three months ended
October 31, 2001. This increase is primarily attributable to the acquisition of
Medical Resources, which generated net patient revenue for the last two months
of the recent period in Massachusetts of $1,370,000. The net patient revenue
increase also included $731,000 of continued successful market penetration of
existing markets. Lastly, the net patient revenue increase also included
$564,000 from the Company's expansion of its operations in New York and New
Jersey to include staffing and related personnel to hospitals, nursing homes and
facilities.
Gross profit margin decreased slightly to 35.7% for the three months ended
October 31, 2002 from 36.2% for the three months ended October 31, 2002. This
decrease is primarily attributable to lower gross profit margins on the new
staffing operations and, in addition, the Company did not experience any
increase in its Medicaid reimbursement rates in Connecticut, New York and New
Jersey during the recent three-month period.
General and administrative expenses increased $779,000, or 16.1%, to
$5,603,000 for the three months ended October 31, 2002 from $4,824,000 for the
three months ended October 31, 2001. This increase is primarily attributable to
additional administrative personnel and occupancy costs incurred in connection
with the acquisition of Medical Resources and the expansion of the Company's
services to include staffing and related operations in New York and New Jersey.
In addition, the Company has experienced significant increases in all of its
insurance costs, as well as increased professional fees. As a percentage of net
patient revenue, general and administrative expenses increased to 24.4% for the
three months ended October 31, 2002 from 23.8% for the three months ended
October 31, 2001.
Amortization of intangibles increased $3,000 to $140,000 for the three
months ended October 31, 2002 from $137,000 for the three months ended October
31, 2001. This increase results from additional such amortization attributable
to the Company's acquisition of Medical Resources, offset by reduced
amortization of intangibles from previous acquisitions that have now been fully
amortized.
The Company recorded an allowance for possible losses of $50,000 for the
three months ended October 31, 2002, as compared to $115,000 for the three
months ended October 31, 2001. The Company had reserved against its accounts
receivable in the previous period as a result of the Company entering into
contracts with many new payor sources over the past two years.
-10-
As a result of the foregoing, income from operations increased $134,000, or
5.9%, to $2,406,000 for the three months ended October 31, 2002 from $2,272,000
for the three months ended October 31, 2001.
Interest income decreased ($23,000), or (29.5%), to $55,000 for the three
months ended October 31, 2002 from $78,000 for the three months ended October
31, 2001. This decrease is attributable to the lower cash balances of the
Company, as a result of the acquisition of Medical Resources and the continued
decline in interest rates.
The Company's effective tax rate increased slightly to 40.1% for the three
months ended October 31, 2002 from 39.8% for the three months ended October 31,
2001.
Net income increased $60,000, or 4.2%, to $1,474,000, or $0.26 per diluted
share, in the three months ended October 31, 2002 from $1,414,000, or $.24 per
diluted share, in the three months ended October 31, 2001. This increase and the
increase in net patient revenue over the periods, as well as over other recent
periods, is attributable principally to the Company's expansions of its
operations through penetrations of markets vacated by competitors and the
successful integration of the Company's acquisitions over the past two years.
Such increases would not be expected to continue at the same rate, if at all, in
the absence of future such acquisitions or market penetrations, as to which
there can be no assurance.
The rate of inflation had no material effect on operations for the three
months ended October 31, 2002.
Financial Condition and Capital Resources
- -----------------------------------------
Current assets decreased to $30,706,000 and current liabilities decreased
to $3,939,000, respectively, at October 31, 2002. This resulted in a decrease in
working capital of ($1,465,000) from $28,232,000 at July 31, 2002 to $26,767,000
at October 31, 2002. Cash and cash equivalents decreased ($2,533,000), to
$12,808,000 at October 31, 2002 from $15,341,000 at July 31, 2002. This decrease
in cash and working capital is attributable to the cash used for the acquisition
of Medical Resources.
The Company provided net cash from operating activities of $575,000 for the
three months ended October 31, 2002 as compared to cash provided by operating
activities of $2,481,000 for the three months ended October 31, 2001. The
decrease in cash provided by operating activities of ($1,906,000), or (76.8%),
is attributable to an increase in operating assets, primarily accounts
receivable, of ($2,296,000), offset by an increase in operating cash flow of
$234,000 and an increase in operating liabilities of $156,000 over the
comparable period for the three months ended October 31, 2001. Net cash used in
investing activities for the three months ended October 31, 2002, consisted of
the purchase of assets of businesses and the purchase of equipment. The net cash
used in investing activities for the three months ended October 31, 2001
consisted of the purchase of assets of businesses, equipment and other investing
activities. Net cash used in financing activities for the three months ended
October 31, 2002 consisted of the purchase of treasury shares. Net cash provided
by financing activities for the three months
-11-
ended October 31, 2001 consisted of the proceeds from the exercise of stock
options, offset by the purchase of treasury shares.
The nature of the Company's business requires weekly payments to health
care personnel at the time services are rendered. The Company typically receives
payment for these services on a basis of 90 to 120 days with respect to
contracted and insurance business and 15 to 45 days with respect to certain
governmental payors, such as Medicare and Medicaid programs. Accounts receivable
turnover was 68 days at October 31, 2002 as compared to 76 days at October 31,
2001.
The Company has a $7,500,000 committed revolving line of credit facility
(the "credit facility") with its bank. The credit facility provides for the
Company to borrow up to the lesser of $7,500,000 or 80% of eligible accounts
receivable that are aged less than 120 days at the bank's prime rate or LIBOR
plus 2.5%. The credit facility expires on October 23, 2003 and requires the
Company to meet certain financial covenants and ratios. The Company is required
to pay .25% commitment fee on unused amounts, payable quarterly in arrears.
The Company intends to incur capital expenditures of approximately
$1,000,000 during the current fiscal year in connection with the proposed
implementation of new computer software systems and hardware. The new software
would be designed to, among other things, update certain data input capability
regarding services rendered at certain locations. The Company believes that the
software would provide efficiencies in data organization, retrieval and
analysis, both for continuing operations and in connection with certain audits.
The Company intends to fund these expenditures and otherwise meet its short term
and long term liquidity needs with its current cash balances, cash flow from
operations and its credit facility.
In October 2002, the Board of Directors extended for one year its program
to repurchase its Common Stock. Purchases in the aggregate of up to $1,000,000
in purchase price during the one-year extension would be made from time to time
in the open market and through privately negotiated transactions, subject to
general market and other conditions. The buyback program will be financed out of
existing cash or cash equivalents.
-12-
ITEM 4- CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
- ------------------------------------------------
The Company maintains disclosure controls and procedures that are designed
to ensure that information required to be disclosed in the reports that the
Company is required to file under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms, and that such
information is accumulated and communicated to the Company's management,
including its principal executive officer and its principal financial officer,
as appropriate, to allow timely decisions regarding required disclosure.
Management necessarily applied its judgment in assessing the costs and benefits
of such controls and procedures which, by their nature, can provide only
reasonable assurance regarding management's control objectives.
Within 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including its Chief Executive Officer and its Vice President of
Finance and Chief Financial Officer, of the effectiveness of the design and
operation of its disclosure controls and procedures pursuant to Exchange Act
Rule 13a-14. Based upon the foregoing, the Company's Chief Executive Officer and
its Vice President of Finance and Chief Financial Officer concluded that the
Company's disclosure controls and procedures are effective in timely alerting
them to material information relating to the Company (and its consolidated
subsidiaries) required to be included in its Exchange Act reports.
-13-
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Certain of the Company's officers and directors (who previously were
outside directors of SunStar) (the "director defendants"), along with thirteen
others, are named as defendants in Department of Insurance of the State of
Florida v. Warren D. Stowell et al. (Circuit Court, Seminole County, Florida) in
which the plaintiff as the receiver of SunStar Health Plan, Inc. (a subsidiary
of SunStar), an insolvent Florida HMO ("Plan"), brings claims which purport to
seek alleged damages relating to the insolvency of Plan. The Company is not a
party to this action. An amended complaint relating to the action captioned
above was filed on November 17, 2000, and on February 12, 2001 the director
defendants filed a motion to dismiss the action. On May 7, 2001, the Court
granted the director defendants' motion to dismiss and granted the plaintiff
leave to serve a further amended complaint. On July 24, 2001, the plaintiff
served an amended complaint. On September 24, 2001 the director defendants filed
a motion to dismiss the amended complaint. This motion has not been decided. On
October 30, 2002, the Florida court with jurisdiction over the receivership of
Plan approved a settlement agreement (previously accounted for) between the
plaintiff and the director defendants (and others) (the "Settlement"). In late
November 2002, two entities which have also been sued by the plaintiff (and have
not entered into any settlement with plaintiff) appealed the above decision
approving the Settlement.
The Company intends to indemnify the director defendants to the fullest
extent permitted under its by-laws and applicable law in connection with the
action described above, subject to independent and disinterested Board members'
review and action with respect to the facts, the final details of the proposed
settlement and the eligibility and entitlement for such indemnification. At this
juncture, it is premature to assess the likelihood of the Company incurring any
material loss by virtue of the action.
-14-
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits:
The following exhibits are filed herewith:
Exhibit
Number Description
99.1 Certificate of Chief Executive Officer
99.2 Certificate of Chief Financial Officer
(b) Reports on Form 8-K:
None
-15-
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
NATIONAL HOME HEALTH CARE CORP.
Date: December 13, 2002 By: /s/ Robert P. Heller
-------------------------------------
Name: Robert P. Heller
Title: Vice President of Finance and Chief
Financial Officer
CERTIFICATION BY PRINCIPAL EXECUTIVE OFFICER
I, Steven Fialkow, certify that:
1. I have reviewed this quarterly report on Form 10-Q of National Home Health
Care Corp.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function): (a) all significant deficiencies in the design or
operation of internal controls which could adversely affect the
registrant's ability to record, process, summarize and report financial
data and have identified for the registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: December 13, 2002
/s/ Steven Fialkow
----------------------------------------
Steven Fialkow
Chief Executive Officer
CERTIFICATION BY PRINCIPAL FINANCIAL OFFICER
I, Robert P. Heller, certify that:
1. I have reviewed this quarterly report on Form 10-Q of National Home Health
Care Corp.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: December 13, 2002
/s/ Robert P. Heller
----------------------------------------
Robert P. Heller
Vice President of Finance and Chief
Financial Officer