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 AUGUST 31, 2003, 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 0-11380
ATC HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2650500
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1983 Marcus Avenue, Lake Success, New York 11042
(Address of principal executive offices) (Zip Code)
(516) 750-1600
(Registrant's telephone number, including area code)
(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
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act) Yes No X
The number of shares of Class A Common Stock and Class B Common Stock
outstanding on October 9, 2003 were 24,618,035 and 247,631 shares, respectively.
ATC HEALTHCARE, INC. AND SUBSIDIARIES
INDEX
PAGE NO.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
August 31, 2003 (unaudited) and February 28, 2003 3
Condensed Consolidated Statements of Operations (unaudited)
Three and six months ended August 31, 2003 and 2002 4
Condensed Consolidated Statements of Cash Flows (unaudited)
Six months ended August 31, 2003 and 2002 5
Notes to Condensed Consolidated Financial Statements (unaudited) 6-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10-13
ITEM 3. QUANTITATIVE AND QUALITATIVE DESCRIPTION
OF MARKET RISK 14
ITEM 4. CONTROLS AND PROCEDURES 14
PART II. OTHER INFORMATION 15
ITEM 1. LEGAL PROCEDINGS 15
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 15
2
PART I. FINANCIAL INFORMATION
ATC HEALTHCARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
August 31, February 28,
2003 2003
(Unaudited)
------------------- --------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 567 $ 585
Accounts receivable, less allowance
for doubtful accounts of $1,133
and $1,784, respectively 27,084 26,876
Deferred income taxes 1,787 1,787
Prepaid expenses and other current assets 3,623 3,087
------------------- --------------------
Total current assets 33,061 32,335
Fixed assets, net 2,117 2,670
Intangibles 6,892 7,186
Goodwill 33,145 33,449
Deferred income taxes 2,188 2,076
Other assets 878 899
------------------- --------------------
Total assets $78,281 $78,615
=================== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $1,099 $1,332
Accrued expenses 6,820 6,192
Book overdraft 2,196 2,580
Current portion due under bank financing 919 679
Current portion of notes and guarantee payable 1,012 896
------------------- --------------------
Total current liabilities 12,046 11,679
Notes and guarantee payable 31,254 31,463
Due under bank financing 23,538 24,249
Other liabilities 41 78
------------------- --------------------
Total liabilities 66,879 67,469
------------------- --------------------
Commitments and contingencies
Convertible Series A Preferred Stock ($.01 par value 4,000 shares authorized,
2,000 and 1,200 shares issued and
outstanding at August 31, 2003 and February 28,
2003, respectively) 1,032 600
------------------- --------------------
STOCKHOLDERS' EQUITY:
Class A Common Stock - $.01 par value;
75,000,000 shares authorized; 24,587,585 and
23,582,552 shares issued and outstanding at August 31, 2003
and February 28, 2003, respectively 245 235
Class B Common Stock - $.01 par value;
1,554,936 shares authorized;
256,191 shares issued and outstanding at August 31, 2003
and February 28, 2003, respectively 3 3
Additional paid-in capital 14,397 13,679
Accumulated deficit (4,275) (3,371)
------------------- --------------------
Total stockholders' equity 10,370 10,546
------------------- --------------------
Total liabilities and stockholders' equity $78,281 $78,615
=================== ====================
See notes to condensed consolidated financial statements.
3
ATC HEALTHCARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
For the Three Months For the Six Months
Ended (unaudited) Ended
August 31, August 31, August 31, August 31,
2003 2002 2003 2002
---- ---- -------- ----
REVENUES:
Service revenues $33,640 $38,979 $67,683 $76,679
- ---------------------------------------------------------------------- ------------- ----------- ------------ ------------
COSTS AND EXPENSES:
Service costs 26,636 29,819 53,198 58,535
General and administrative expenses 6,006 7,345 12,414 14,518
Depreciation and amortization 594 527 1,181 877
- ---------------------------------------------------------------------- ------------- ----------- ------------ ------------
Total operating expenses 33,236 37,691 66,793 73,930
- ---------------------------------------------------------------------- ------------- ----------- ------------ ------------
INCOME FROM OPERATIONS 404 1,288 890 2,749
- ---------------------------------------------------------------------- ------------- ----------- ------------ ------------
INTEREST AND OTHER EXPENSES (INCOME):
Interest expense, net 1,115 766 1,963 1,509
Other (income), net (57) (230) (89) (235)
- ---------------------------------------------------------------------- ------------- ----------- ------------ ------------
Total interest and other expenses 1,058 536 1,874 1,274
- ---------------------------------------------------------------------- ------------- ----------- ------------ ------------
(LOSS) INCOME BEFORE INCOME TAXES (654) 752 (984) 1,475
INCOME TAX (BENIFIT) PROVISION -- 310 (112) 606
- ---------------------------------------------------------------------- ------------- ----------- ------------ ------------
NET (LOSS) INCOME $ (654) $ 442 $ (872) $ 869
====================================================================== ============= =========== ============ ============
DIVIDENDS ACCRETED TO PREFERRED SHAREHOLDERS 17 32
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ (671) $ 442 $ (904) $ 869
- ---------------------------------------------------------------------- ------------- ----------- ------------ ------------
(LOSS) EARNINGS PER COMMON SHARE - BASIC: $ (.03) $ .02 $ (.04) $ .04
====================================================================== ============= =========== ============ ============
(LOSS) EARNINGS PER COMMON SHARE - DILUTED $ (.03) $ .02 $ (.04) $ .03
====================================================================== ============= =========== ============ ============
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
Basic 24,238 23,759 24,049 23,726
====================================================================== ============= =========== ============ ============
Diluted 24,238 26,796 24,049 27,218
====================================================================== ============= =========== ============ ============
See notes to condensed consolidated financial statements.
4
ATC HEALTHCARE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
Six Months Ended
August 31, August 31,
2003 2002
-----------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $(872) $869
Adjustments to reconcile net (loss) income to net cash provided by
Operating activities:
Depreciation and amortization 1,181 877
Disposition of goodwill and intangibles -- 42
Amortization of Debt Financing costs 124 79
Provision for doubtful accounts (651) (32)
Deferred Income Taxes (112) --
Accrued Interest 457 437
Changes in operating assets and liabilities net of
Effects of acquisitions
Accounts receivable 443 (328)
Prepaid expenses and other current assets (536) (627)
Other assets (26) (60)
Accounts payable and accrued expenses 395 366
Other long-term liabilities (37) (7)
---------------------------------
Net cash provided by operating activities 366 1,616
---------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (161) (206)
Finalization of acquisition purchase price 150
Acquisition of business (20) (457)
Cash received for repayment of notes receivable -- 43
---------------------------------
Net cash used in investing activities (31) (620)
---------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of notes and capital lease obligations (1,649) (1,690)
Repayment of term loan facility (695)
Book overdraft (384)
Debt Financing costs (77)
Issuance of preferred and Common Stock 1,128 114
Borrowings (payments) due under credit facility 1,324 (48)
---------------------------------
Net cash (used in) financing activities (353) (1,624)
---------------------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (18) (628)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 585 1,320
---------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $567 $692
=================================
Supplemental Data:
Interest paid $961 $ 1,057
=================================
Income taxes paid $86 $ 135
=================================
Issuance of notes payable for acquisition of businesses -- $ 820
=================================
See notes to condensed consolidated financial statements.
5
ATC HEALTHCARE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Amounts in
Thousands, Except Where Indicated Otherwise, and for Per Share Amounts)
1. BASIS OF PRESENTATION - The accompanying condensed consolidated financial
statements as of August 31, 2003 and for the three and six months ended August
31, 2003 and 2002 are unaudited. In the opinion of management, all adjustments,
consisting of only normal and recurring accruals necessary for a fair
presentation of the consolidated financial position and results of operations
for the periods presented have been included. The condensed consolidated balance
sheet as of February 28, 2003 was derived from audited financial statements but
does not include all disclosures required by generally accepted accounting
principles. The accompanying condensed consolidated financial statements should
be read in conjunction with the condensed consolidated financial statements and
notes thereto included in the Annual Report on Form 10-K of ATC Healthcare, Inc.
(the "Company") for the year ended February 28, 2003. Certain prior period
amounts have been reclassified to conform with the August 31, 2003 presentation.
Results for the three and six month periods ended August 31, 2003 are not
necessarily indicative of the results for the full year ending February 29,
2004.
2. EARNINGS PER SHARE -Basic earnings (loss) per share is computed using the
weighted average number of common shares outstanding for the applicable period.
Diluted earnings (loss) per share is computed using the weighted average number
of common shares plus common equivalent shares outstanding, unless the inclusion
of such common equivalent shares would be anti-dilutive. Earnings per share for
the three and six months ended August 31, 2002 include common stock equivalents
of 3,037 and 3,492 shares relating to the dilutive effect of stock options. For
the three and six months ended August 31, 2003, common stock equivalents would
have been anti-dilutive.
3. PROVISION (BENEFIT) FOR INCOME TAXES - Management believes that it is more
likely than not that the Company's deferred tax assets will be realized through
future profitable operations. This is based upon the fact that the company has
had profitable operations in each of its quarters since September 1, 2000
through the third quarter ended November 30, 2002, which quarterly results are
profitable before a charge for the guarantee of certain debt of a former related
party, Tender Loving Care Health Care Services, Inc. ("TLCS"). Losses incurred
in the fourth quarter of fiscal 2003 and first and second quarters of fiscal
2004 were primarily due to an unexpected shortfall in hospital patient volumes,
which volumes appear to be returning in the third quarter of fiscal 2004 and
increased borrowing costs. As of February 28, 2003, the Company has a Federal
net operating loss of approximately $2.4 million which expires in 2020 through
2023.
4. RECENT ACQUISITIONS - In January 2002, the Company purchased substantially
all of the assets of Direct Staffing, Inc. ("DSI"), a licensee of the Company
serving the territory consisting of Westchester County, New York and Northern
New Jersey, and DSS Staffing Corp. ("DSS"), a licensee of the Company serving
New York City and Long Island, New York for a purchase price of $30.2 million.
These two licensees were owned by an unrelated third party and by a son and two
sons-in-law of the Company's Chairman of the Board of Directors who have
received an aggregate 60% of the proceeds of the sale. Under the original
purchase agreement, the Company had agreed to pay contingent consideration equal
to the amount by which (a) the product of (i) Annualized Revenues (as defined in
the purchase agreement) and (ii) 5.25 exceeds (b) $17.2 million but if and only
if the resulting calculation exceeds $20 million. However, under the June 13,
2003 amendment discussed below, the contingent obligation was terminated.
The Company has obtained a valuation on the tangible and intangible assets
associated with the transaction and has allocated $6.4 million to customer lists
(which is being amortized over 10 years), $200,000 to a covenant not to compete
(which is being amortized over 8 years) and the remaining balance to goodwill.
The purchase price was initially evidenced by two series of promissory notes
issued to each of the four owners of DSS and DSI. The first series of notes (the
"First Series"), in the aggregate principal amount of $12.9 million bore
interest at the rate of 5% per annum and was payable in 36 consecutive equal
monthly installments of principal, together with interest thereon, with the
first installment becoming due on March 1, 2002. The second series of notes (the
"Second Series"), in the aggregate principal amount of $17.2 million, bore
interest at the rate of 5% per annum and was payable as follows: $11 million,
together with interest thereon, on April 30, 2005 (or earlier if certain capital
events occur prior to such date) and the balance in 60 consecutive equal monthly
installments of principal, together with interest thereon, with the first
installment becoming due on April 30, 2005. Payment of both the First Series and
the Second Series was collateralized by a second lien on the assets of the
acquired licensees.
6
On June 13, 2003, the debt between the Company and the noteholders was amended
to reduce the aggregate monthly payments and extend the terms thereof. In
connection therewith, the subordination agreement between the Company, the
noteholders and the Company's primary lender was also amended. The two series of
promissory notes to the former owners of DSS and DSI have been condensed into
one series of notes. One of the promissory notes is for a term of seven years,
in the principal amount of $8.6 million, bears interest at the rate of 5% per
annum, with a minimum monthly payment (including interest) of $40,000, with the
first installment becoming due on June 13, 2003, and minimum monthly payments
(including interest) of $80,000 beginning on June 1, 2004, thereafter, with a
balloon payment of $3.7 million due on May 7, 2007. The balance on the first
note after the balloon payment is payable in minimum monthly installments of
$80,000 over the remaining three years of the note, subject to certain
limitations under the amended subordination agreement. The other three
promissory notes are for ten years, in the aggregate principal amount of $17.5
million, bear interest at the rate of 5% per annum, with minimum monthly
payments (including interest) of $25,000, in the aggregate, with the first
installment becoming due on June 13, 2003, and minimum monthly payments
(including interest) of $51,000, in the aggregate beginning on June 1, 2004,
thereafter. Any unpaid balances at the end of the note terms will be due at that
time. If the Company achieves certain financial ratios, its minimum monthly
payments under all four of the notes will be increased, as provided in the
amended subordination agreement. Payment of the notes is collateralized by a
second lien on the assets of the original franchises. In conjunction with the
amendment of the notes, one of the note holders reduced his note by
approximately $2.8 million, subject to the Company's continued compliance with
the modified subordination agreement. Accordingly the Company will not reduce
its debt balance until all of the contingencies are resolved.
In June 2002 the Company bought out a management contract with a company
("Travel Company") which was managing its travel nurse division. The purchase
price of $620,000 is payable over two years beginning in December 2002. The
Company is amortizing the cost of the buyout over the five years that were
remaining on the management contract.
During fiscal 2003, the Company purchased substantially all of the assets and
operations of 8 temporary medical staffing companies totaling $3.1 million, of
which $2.1 million was paid in cash and the remaining balance is payable under
notes payable with maturities through January 2007. The notes bear interest at
rates between 6% to 8% per annum. The purchase prices were allocated primarily
to goodwill (approximately $2.3 million).
The acquisitions were accounted for under the purchase method of accounting; and
accordingly, the accompanying consolidated financial statements include the
results of the acquired operations from their respective acquisition dates.
5. DEBT - During April 2001, the Company entered into a Financing Agreement with
a lending institution, whereby the lender agreed to provide a revolving credit
facility of up to $25 million. The Financing Agreement was amended in October
2001 to increase the facility to $27.5 million. Amounts borrowed under the New
Financing Agreement were used to repay $20.6 million of borrowing on its
existing facility.
Availability under the Financing Agreement is based on a formula of eligible
receivables, as defined in the Financing Agreement. The borrowings bear interest
at rates based on LIBOR plus 3.65%. At February 28, 2002, the interest rate was
5.65%. Interest rates ranged from 5.4% to 8.2% in fiscal 2002. An annual fee of
0.5% is required based on any unused portion of the total loan availability.
In November 2002, the lending institution with which the Company has the secured
facility, increased the revolving credit line to $35 million and provided for an
additional term loan facility totaling $5 million. Interest accrues at a rate of
3.95% over LIBOR on the revolving credit line and 6.37% over LIBOR on the term
loan facility. The Facility expires in November 2005. The term loan facility is
for acquisitions and capital expenditures. Repayment of this additional term
facility will be on a 36 month straight line amortization.
The Agreement contains various restrictive covenants that, among other
requirements, restrict additional indebtedness. The covenants also require the
Company to meet certain financial ratios.
In November 2002, the interest rates were revised to 4.55% over LIBOR on the
revolving line and 7.27% over LIBOR on the term loan facility as part of a loan
modification.
On June 13, 2003, the Company received a waiver from the lender for
non-compliance of certain Facility covenants as of February 28, 2003. Interest
rates on both the revolving line and term loan facility were increased 2% and
can decrease if the Company meets certain financial criteria.
7
In addition, certain financial ratio covenants were modified. The additional
interest is not payable until the current expiration date of the Facility in
November 2005.
As of August 31, 2003 and 2002, the outstanding balance on the revolving credit
facility was $21.5 million and $23.5 million, respectively. The Company had
outstanding borrowings under the term loan of $3.0 as of August 31, 2003.
Guarantee of TLCS Liability - The Company is contingently liable on $2.3 million
of obligations owed by TLCS which is payable over eight years. The Company is
indemnified by TLCS for any obligations arising out of these matters. On
November 8, 2002, TLCS filed a petition for relief under Chapter 11 of the
United States Bankruptcy Code. As a result, the Company has recorded a provision
of $2.3 million representing the balance outstanding on the related TLCS
obligations. The Company has not received any demands for payment with respect
to these obligations. The next payment is due in September 2003. The obligation
is payable over 8 years. The Company believes that it has certain defenses which
could reduce or eliminate its recorded liability in this matter.
6. REVENUE RECOGNITION - A substantial portion of the Company's service revenues
are derived from a unique form of franchising under which independent companies
or contractors ("licensees") represent the Company within a designated
territory. These licensees assign Company personnel, including registered nurses
and therapists, to service clients using the Company's trade names and service
marks. The Company pays and distributes the payroll for the direct service
personnel who are all employees of the Company, administers all payroll
withholdings and payments, bills the customers and receives and processes the
accounts receivable. The revenues and related direct costs are included in the
Company's consolidated service revenues and operating costs. The licensees are
responsible for providing an office and paying related expenses for
administration including rent, utilities and costs for administrative personnel.
The Company pays a monthly distribution or commission to its domestic licensees
based on a defined formula of gross profit generated. Generally, the Company
pays a licensee approximately 55% (60% for certain licensees who have longer
relationships with the Company). There is no payment to the licensees based
solely on revenues. For the three months ended August 31, 2003 and 2002, total
licensee distributions were approximately $1.8 million and $2.5 million
respectively, and for the six months ended August 31, 2003 and 2002 total
licensee distributions were approximately $3.5 million and $4.8 million
respectively, and are included in the general and administrative expenses.
The Company recognizes revenue as the related services are provided to customers
and when the customer is obligated to pay for such completed services. Revenues
are recorded net of contractual or other allowances to which customers are
entitled. Employees assigned to particular customers may be changed at the
customer's request or at the Company's initiation. A provision for uncollectible
and doubtful accounts is provided for amounts billed to customers which may
ultimately be uncollectible due to billing errors, documentation disputes or the
customer's inability to pay.
Revenues generated from the sales of licensees and initial licensee fees are
recognized upon signing of the licensee agreement, if collectibility of such
amounts is reasonably assured, since the Company has performed substantially all
of its obligations under its licensee agreements by such date. Included in
revenues for the six months ended August 31, 2003 and 2002 is $449,000 and
$430,000 of licensee fees.
7. INTANGIBLE ASSETS - On March 1, 2002, the Company adopted Statement of
Financial Accounting Standards No. 142 "Goodwill and Intangible Assets" (SFAS
142). SFAS 142 includes requirements to annually test goodwill and indefinite
lived intangible assets for impairment rather than amortize them; accordingly,
the Company no longer amortizes goodwill and indefinite lived intangibles.
8. CONTINGENCIES
The Company is subject to various claims and legal proceedings covering a wide
range of matters that arise in the ordinary course of business. Management
believes the disposition of the lawsuits will not have a material effect on its
financial position, results of operations or cash flows.
9. RECENT ACCOUNTING PRONOUNCEMENTS
Management does not believe that any other recently issued, but not yet
effective, accounting standards if currently adopted would have a material
effect on the accompanying financial statements.
8
10. SHAREHOLDERS EQUITY - On March 10, 2003, the Company sold 300 shares of its
7% Convertible Series A Preferred Stock ("the Preferred Stock") and received
cash proceeds of $150,000. The purchasers of the stock were two executive
officers of the Company. This stock is convertible to Common Stock at the price
of $.80 per share which is 120% of the weighted average market close price of
the Company's Common Stock for the ten day trading period ending on the date of
the purchase of the Convertible Preferred Stock. On April 30, 2003, the Company
sold 500 shares of its Preferred Stock and received cash proceeds of $250,000.
The purchasers of the stock were two executive officers of the Company and two
accredited investors. This stock is convertible to Common Stock at the price of
$.93 per share which is 120% of the weighted average market close price of the
Company's Common Stock for the ten day trading period ending on the date of the
purchase of the Preferred Stock.
On July 16, 2003 the Company sold 367,647 shares of Series A Common Stock at
$.68 per share. On July 23, 2003 the Company sold 202,703 shares of Series A
Common Stock at $.74 per share. On July 24, 2003 the Company sold 133,333 shares
of Series A Common Stock at $.75 per share and on August 19, 2003 the Company
sold 256,410 shares of Series A Common stock at $.78 per share. The sales price
per share was equal to or exceeded the market price of the Company's common
stock at the date of each transaction. The purchasers of the Series A Common
Stock were related to two executive officers of the Company.
On August 12, 2003 the shareholders of the Company approved an amendment to the
Company's Restated Certificate of Incorporation to increase the total number of
authorized shares of Class A Common Stock from 50,000,000 shares to 75,000,000
shares.
The Company accounts for its employee incentive stock option plans using the
intrinsic value method in accordance with the recognition and measurement
principles of Accounting Principles Board Opinion No 25 " Accounting for Stock
Issued to Employees," as permitted by SFAS No. 123. Had the Company determined
compensation expense based on the fair value at the grant dates for those awards
consistent with the method of SFAS 123, the Company's net income (loss) per
share would have been increased to the following pro forma amounts:
- ---------------------------------- ------------------- -------------------- ---------------------- ----------------------
(In thousands, except per share For the three For the three For the six For the six
data) months ended months ended months ended months ended
August 31,2003 August 31,2002 August 31, 2003 August 31,2002
- ---------------------------------- ------------------- -------------------- ---------------------- ----------------------
Net (loss) income as reported $(654) $442 $(872) $869
- ---------------------------------- ------------------- -------------------- ---------------------- ----------------------
Deduct total stock based employee
compensation expense determined
under fair value based on
methods for all awards $ 36 $ 15 $ 49 $ 31
- ---------------------------------- ------------------- -------------------- ---------------------- ----------------------
Pro forma net (loss) income $(690) $ 427 $(921) $838
- ---------------------------------- ------------------- -------------------- ---------------------- ----------------------
Basic net (loss) earnings per
share as reported $ (.03) $ .02 $ (.04) $ .04
- ---------------------------------- ------------------- -------------------- ---------------------- ----------------------
Pro forma basic (loss) earnings
per share as reported $ (.03) $ .02 $ (.04) $ .04
- ---------------------------------- ------------------- -------------------- ---------------------- ----------------------
Diluted (loss) earnings per
share as reported $ (.03) $ .02 $ (.04) $ .03
- ---------------------------------- ------------------- -------------------- ---------------------- ----------------------
Pro forma diluted (loss)
earnings per share as reported $ (.03) $ .02 $ (.04) $ .03
- ---------------------------------- ------------------- -------------------- ---------------------- ----------------------
9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (Amounts in Thousands, Except Where Indicated Otherwise, and for
Per Share Amounts)
The following discussion and analysis provides information which 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 Condensed Consolidated Financial Statements appearing in
Item 1.
Results of Operations
Total revenues for the three month period ended August 31, 2003 were $33.6
million, a decrease of $5.3 million or 13.7% from total revenues of $38.9
million for the three months ended August 31, 2002. Total revenues for the six
month period ended August 31,2003 were $67.7 million, a decrease of $9.0 million
or 11.7% from total revenues of $76.7 million for the six months ended August
31, 2002. The revenue decrease is primarily due to reduced demand for temporary
nurses as hospitals are continuing to experience flat to declining admission
rates.
Service costs were 79.2% and 76.5% of total revenues for the three months ended
August 31, 2003 and 2002, respectively, and 78.6% and 76.3% for the six months
ended August 31, 2003 and 2002, respectively. Margins have declined due to the
decreased demand for temporary nurses which has increased the competitive
environment pressuring fees and increased insurance costs. Service costs
represent the direct costs of providing services to patients or clients,
including wages, payroll taxes, travel costs, insurance costs, medical supplies
and the cost of contracted services.
General and administrative expenses were $6.0 and $7.3 million for the three
months ended August 31, 2003 and 2002, and were $12.4 million and $14.5 million
for the six months ended August 31, 2003 and 2002, respectively. General and
administrative costs, expressed as a percentage of total revenues, were 17.8%
and 18.8% for the three months ended August 31, 2003 and 2002, respectively, and
was 18.3% and 18.9% for the six months ended August 31, 2003 and 2002,
respectively. The reduction in general and administrative expenses as a
percentage of sales in 2003 is the result of the reduction in royalty payments
to licensees due to decreased revenues as well initiatives undertaken by the
Company to reduce the size of or close marginally performing offices and a
reduction of back office support staff.
Interest expense (net), increased to $1.1 million from $766,000 for the three
months ended August 31, 2003 versus 2002 and increased to $1.9 million from $1.5
million for the six months ended August 31, 2003 versus 2002, primarily due to
interest costs associated with the Company's term loan facility and to increased
interest rates associated with its revolving line of credit.
Liquidity and Capital Resources
Cash and cash equivalents decreased by $18,000 as of August 31, 2003 as compared
to February 28, 2003 as a result of cash used in investing activities of $31,000
and financing activities of $353,000 offset by cash provided by operations of
$366,000. Cash used in investing activities was primarily used for capital
expenditures and the cash used in financing activities was primarily used to pay
notes and capital lease obligations.
In April 2001, the Company obtained a new financing facility (the "Facility")
with a new lending institution for a $25 million, three year term, revolving
loan, $20.6 million of which was used to pay down borrowings under the Company's
previous financing facility. The Facility limit was increased to $27.5 million
in October 2001. Under the Facility, the Company may borrow amounts up to 85% of
the Company's eligible accounts receivable subject to a maximum of $27.5
million. Interest on borrowings under the Facility is at the annual rate of
3.65% over LIBOR in addition to a .5% annual fee for the unused portion of the
total loan availability.
In November 2002, the lending institution with which the Company has the
Facility, increased the revolving credit line to $35 million and provided for an
additional term loan facility totaling $5 million. Interest accrues at a rate of
3.95% over LIBOR on the revolving credit line and 6.37% over LIBOR on the term
loan facility. The New Facility expires in November 2005. The term loan facility
is for acquisitions and capital expenditures. Repayment of this additional term
facility will be in 36 equal monthly installments.
10
In November 2002, the interest rates were revised to 4.55% over LIBOR on the
revolving line and 7.27% over LIBOR on the term loan facility as part of a loan
modification.
On June 13, 2003, the Company received a waiver from the lender for
non-compliance with certain Facility covenants as of February 28, 2003. Interest
rates on both the revolving line and term loan facility were increased 2% and
can decrease if the Company meets certain financial criteria. In addition,
certain financial ratio covenants were modified. The additional interest is not
payable until the current expiration date of the Facility which is November
2005.
At the same time, the lender and DSS and DSI note holders amended the
subordination agreements. As a result of that amendment, the two series of
promissory notes to the former owners of DSS and DSI have been condensed into
one series of notes. One of the promissory notes is for a term of seven years,
in the principal amount of $8.6 million, bears interest at the rate of 5% per
annum, with a minimum monthly payment (including interest) of $40,000 with the
first installment becoming due on June 13, 2003, and minimum monthly payments
(including interest) of $80,000 beginning on June 1, 2004, thereafter, with a
balloon payment of $3.7 million due on May 7, 2007. The balance on the first
note after the balloon payment is payable in minimum monthly installments of
$80,000 over the remaining 3 years of the note, subject to certain limitations
under the amended subordination agreement. The other three promissory notes are
for ten years, in the aggregate principal amount of $17.5 million, bear interest
at the rate of 5% per annum, with minimum monthly payments (including interest)
of $25,000 in the aggregate, with the first installment becoming due on June 13,
2003, and minimum monthly payments (including interest) of $51,000 in the
aggregate beginning on June 1, 2004, thereafter. Any unpaid balances at the end
of the note terms will be due at that time. If the Company achieves certain
financial ratios, its minimum monthly payments under all four of the notes will
be increased, as provided in the amended subordination agreement. Payment of the
notes is collateralized by a second lien on the assets of the original
franchises. In conjunction with the amendment of the notes, one of the note
holders reduced his note by approximately $2.8 million, subject to the Company's
compliance with the modified subordination agreement.
The Company anticipates that capital expenditures for furniture and equipment,
including improvements to its management information and operating systems
during the next twelve months will be approximately $400,000.
Operating cash flows have been our primary source of liquidity and historically
have been sufficient to fund our working capital, capital expenditures, and
internal business expansion and debt service. The Company's cash flow has been
aided by the recent sales of unregistered securities and by the debt
restructuring completed on June 13, 2003. We believe that our capital resources
are sufficient to meet our working capital requirements for the next twelve
months. We expect to meet our future working capital, capital expenditure,
internal business expansion, and debt service from a combination of operating
cash flows and funds available under the Facility.
Business Trends
Sales and margins have been under pressure as demand for temporary nurses is
currently going through a period of contraction. Hospitals are experiencing flat
to declining admission rates and are placing greater reliance on full-time staff
overtime and increased nurse patient loads. Because of difficult economic times,
nurses in many households are becoming the primary breadwinner, causing them to
seek more traditional full time employment. The U.S. Department of Health and
Human Services said in a July 2002 report that the national supply of full-time
equivalent registered nurses was estimated at 1.89 million and demand was
estimated at 2 million. The 6 percent gap between the supply of nurses and
vacancies in 2000 is expected to grow to 12 percent by 2010 and then to 20
percent five years later. As the economy rebounds, the prospects for the medical
staffing industry and the Company should improve as hospitals experience higher
admission rates and increasing shortages of healthcare workers.
11
Forward-Looking Statements
Certain statements in this Quarterly Report on Form 10-Q constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. From time to time, the Company also provides
forward-looking statements in other materials it releases to the public as well
as oral forward-looking statements. These statements are typically identified by
the inclusion of phrases such as "the Company anticipates," "the Company
believes" and other phrases of similar meaning. These forward-looking statements
are based on the Company's current expectations. Such forward-looking statements
involve known and unknown risks, uncertainties, and other factors that may cause
the actual results, performance or achievements of the Company to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. The potential risks and
uncertainties which would cause actual results to differ materially from the
Company's expectations include, but are not limited to, those discussed below in
the section entitled "Risk Factors." Readers are cautioned not to place undue
reliance on these forward-looking statements, which reflect management's
opinions only as of the date hereof. The Company undertakes no obligation to
revise or publicly release the results of any revision to these forward-looking
statements. Readers should carefully review the risk factors described in other
documents the Company files from time to time with the Securities and Exchange
Commission.
Risk Factors
Currently We Are Unable to Recruit Enough Nurses to Meet Our Clients' Demands
for our Nurse Staffing Services, Limiting the Potential Growth of Our Staffing
Business
We rely significantly on our ability to attract, develop and retain nurses and
other healthcare personnel who possess the skills, experience and, as required,
licenses necessary to meet the specified requirements of our healthcare staffing
clients. We compete for healthcare staffing personnel with other temporary
healthcare staffing companies, as well as actual and potential clients, some of
which seek to fill positions with either regular or temporary employees.
Currently, there is a shortage of qualified nurses in most areas of the United
States and competition for nursing personnel is increasing. This shortage of
nurses limits our ability to grow our staffing business. Furthermore, we believe
that the aging of the existing nurse population and declining enrollments in
nursing schools will further exacerbate the existing nurse shortage. In
addition, in the aftermath of the terrorist attacks on New York and Washington,
we experienced a temporary interruption of normal business activity. Similar
events in the future could result in additional temporary or longer-term
interruptions of our normal business activity, which would adversely affect our
financial results.
The Costs of Attracting and Retaining Qualified Nurses and Other Healthcare
Personnel May Rise More than We Anticipate
We compete with other healthcare staffing companies for qualified nurses and
other healthcare personnel. Because there is currently a shortage of qualified
healthcare personnel, competition for these employees is intense. To induce
healthcare personnel to sign on with them, our competitors may increase hourly
wages or other benefits. If we do not raise wages in response to such increases
by our competitors, we could face difficulties attracting and retaining
qualified healthcare personnel. In addition, if we raise wages in response to
our competitors' wage increases and are unable to pass such cost increases on to
our clients, our margins could decline.
We Operate in a Highly Competitive Market and Our Success Depends on our Ability
to Remain Competitive in Obtaining and Retaining Hospital and Healthcare
Facility Clients and Temporary Healthcare Professionals.
The temporary medical staffing business is highly competitive. We compete in
national, regional and local markets with full-service staffing companies and
with specialized temporary staffing agencies. Some of these companies may have
greater marketing and financial resources than we do. Competition for hospital
and healthcare facility clients and temporary healthcare professionals may
increase in the future and, as a result, we may not be able to remain
competitive. To the extent competitors seek to gain or retain market share by
reducing prices or increasing marketing expenditures, we could lose revenues or
hospital and healthcare facility clients and our margins could decline, which
could seriously harm our operating results and cause the price of our stock to
decline. In addition, the development of alternative recruitment channels could
lead our hospital and healthcare facility clients to bypass our services, which
would also cause our revenues and margins to decline.
12
Our Business Depends upon our Continued Ability to Secure and Fill New Orders
from our Hospital and Healthcare Facility Clients, Because We Do Not Have
Long-Term Agreements or Exclusive Contracts With Them.
We do not have long-term agreements or exclusive guaranteed order contracts with
our hospital and healthcare facility clients. The success of our business
depends upon our ability to continually secure new orders from hospitals and
other healthcare facilities and to fill those orders with our temporary
healthcare professionals. Our hospital and healthcare facility clients are free
to place orders with our competitors and may choose to use temporary healthcare
professionals that our competitors offer them. Therefore, we must maintain
positive relationships with our hospital and healthcare facility clients. If we
fail to maintain positive relationships with our hospital and healthcare
facility clients, we may be unable to generate new temporary healthcare
professional orders and our business may be adversely affected.
Decreases in Patient Occupancy at Our Clients' Facilities May Adversely Affect
the Profitability of Our Business
Demand for our temporary healthcare staffing services is significantly affected
by the general level of patient occupancy at our clients' facilities. When a
hospital's occupancy increases, temporary employees are often added before
full-time employees are hired. As occupancy decreases, clients may reduce their
use of temporary employees before undertaking layoffs of their regular
employees. We also may experience more competitive pricing pressure during
periods of occupancy downturn. In addition, if a trend emerges toward providing
healthcare in alternative settings, as opposed to acute care hospitals,
occupancy at our clients' facilities could decline. This reduction in occupancy
could adversely affect the demand for our services and our profitability.
Healthcare Reform Could Negatively Impact Our Business Opportunities, Revenues
and Margins.
The U.S. government has undertaken efforts to control increasing healthcare
costs through legislation, regulation and voluntary agreements with medical care
providers and drug companies. In the recent past, the U.S. Congress has
considered several comprehensive healthcare reform proposals. The proposals were
generally intended to expand healthcare coverage for the uninsured and reduce
the growth of total healthcare expenditures. While the U.S. Congress did not
adopt any comprehensive reform proposals, members of Congress may raise similar
proposals in the future. If any of these proposals are approved, hospitals and
other healthcare facilities may react by spending less on healthcare staffing,
including nurses. If this were to occur, we would have fewer business
opportunities, which could seriously harm our business.
State governments have also attempted to control increasing healthcare costs.
For example, the state of Massachusetts has recently implemented a regulation
that limits the hourly rate payable to temporary nursing agencies for registered
nurses, licensed practical nurses and certified nurses' aides. The state of
Minnesota has also implemented a statute that limits the amount that nursing
agencies may charge nursing homes. Other states have also proposed legislation
that would limit the amounts that temporary staffing companies may charge. Any
such current or proposed laws could significantly harm our business, revenues
and margins.
Furthermore, third party payors, such as health maintenance organizations,
increasingly challenge the prices charged for medical care. Failure by hospitals
and other healthcare facilities to obtain full reimbursement from those third
party payors could reduce the demand or the price paid for our staffing
services.
We are Dependent on the Proper Functioning of Our Information Systems
Our company is dependent on the proper functioning of our information systems in
operating our business. Critical information systems used in daily operations
identify and match staffing resources and client assignments and perform billing
and accounts receivable functions. Our information systems are protected through
physical and software safeguards and we have backup remote processing
capabilities. However, they are still vulnerable to fire, storm, flood, power
loss, telecommunications failures, physical or software break-ins and similar
events. In the event that critical information systems fail or are otherwise
unavailable, these functions would have to be accomplished manually, which could
temporarily impact our ability to identify business opportunities quickly, to
maintain billing and clinical records reliably and to bill for services
efficiently.
13
We May be Legally Liable for Damages Resulting from our Hospital and Healthcare
Facility Clients' Mistreatment of our Healthcare Personnel.
Because we are in the business of placing our temporary healthcare professionals
in the workplaces of other companies, we are subject to possible claims by our
temporary healthcare professionals alleging discrimination, sexual harassment,
negligence and other similar activities by our hospital and healthcare facility
clients. The cost of defending such claims, even if groundless, could be
substantial and the associated negative publicity could adversely affect our
ability to attract and retain qualified healthcare professionals in the future.
If Regulations that Apply to us Change, We May Face Increased Costs That Reduce
Our Revenue and Profitability
The temporary healthcare staffing industry is regulated in many states. In some
states, firms such as our company must be registered to establish and advertise
as a nurse staffing agency or must qualify for an exemption from registration in
those states. If we were to lose any required state licenses, we could be
required to cease operating in those states. The introduction of new regulatory
provisions could substantially raise the costs associated with hiring temporary
employees. For example, some states could impose sales taxes or increase sales
tax rates on temporary healthcare staffing services. These increased costs may
not be able to be passed on to clients without a decrease in demand for
temporary employees. In addition, if government regulations were implemented
that limited the amounts we could charge for our services, our profitability
could be adversely affected.
Future Changes in Reimbursement Trends Could Hamper Our Clients' Ability to Pay
Us
Many of our clients are reimbursed under the federal Medicare program and state
Medicaid programs for the services they provide. In recent years, federal and
state governments have made significant changes in these programs that have
reduced reimbursement rates. In addition, insurance companies and managed care
organizations seek to control costs by requiring that healthcare providers, such
as hospitals, discount their services in exchange for exclusive or preferred
participation in their benefit plans. Future federal and state legislation or
evolving commercial reimbursement trends may further reduce, or change
conditions for, our clients' reimbursement. Limitations on reimbursement could
reduce our clients' cash flows, hampering their ability to pay us.
Competition for Acquisition Opportunities May Restrict Our Future Growth by
Limiting Our Ability to Make Acquisitions at Reasonable Valuations
Our business strategy includes increasing our market share and presence in the
temporary healthcare staffing industry through strategic acquisitions of
companies that complement or enhance our business. We have historically faced
competition for acquisitions. In the future, such competition could limit our
ability to grow by acquisitions or could raise the prices of acquisitions and
make them less attractive to us.
We May Face Difficulties Integrating Our Acquisitions Into Our Operations and
Our Acquisitions May be Unsuccessful, Involve Significant Cash Expenditures or
Expose Us to Unforeseen Liabilities
We continually evaluate opportunities to acquire healthcare staffing companies
and other human capital management services companies that complement or enhance
our business. From time to time, we engage in strategic acquisitions of such
companies or their assets.
These acquisitions involve numerous risks, including:
- potential loss of key employees or clients of acquired companies;
- difficulties integrating acquired personnel and distinct cultures into
our business;
- difficulties integrating acquired companies into our operating,
financial planning and financial reporting systems;
- diversion of management attention from existing operations; and
- assumption of liabilities and exposure to unforeseen liabilities of
acquired companies, including liabilities for their failure to comply
with healthcare regulations.
14
These acquisitions may also involve significant cash expenditures, debt
incurrence and integration expenses that could have a material adverse effect on
our financial condition and results of operations. Any acquisition may
ultimately have a negative impact on our business and financial condition.
Significant Legal Actions Could Subject Us to Substantial Uninsured Liabilities
In recent years, healthcare providers have become subject to an increasing
number of legal actions alleging malpractice, product liability or related legal
theories. Many of these actions involve large claims and significant defense
costs. In addition, we may be subject to claims related to torts or crimes
committed by our employees or temporary staffing personnel. In some instances,
we are required to indemnify clients against some or all of these risks. A
failure of any of our employees or personnel to observe our policies and
guidelines intended to reduce these risks, relevant client policies and
guidelines or applicable federal, state or local laws, rules and regulations
could result in negative publicity, payment of fines or other damages. To
protect ourselves from the cost of these claims, we maintain professional
malpractice liability insurance and general liability insurance coverage in
amounts and with deductibles that we believe are appropriate for our operations.
However, our insurance coverage may not cover all claims against us or continue
to be available to us at a reasonable cost. If we are unable to maintain
adequate insurance coverage, we may be exposed to substantial liabilities, which
could adversely affect our financial results.
If Our Insurance Costs Increase Significantly, These Incremental Costs Could
Negatively Affect Our Financial Results
The costs related to obtaining and maintaining workers compensation,
professional and general liability insurance and health insurance for healthcare
providers has been increasing. If the cost of carrying this insurance continues
to increase significantly, we will recognize an associated increase in costs
which may negatively affect our margins. This could have an adverse impact on
our financial condition and the price of our common stock.
If We Become Subject to Material Liabilities Under Our Self-Insured Programs,
Our Financial Results May Be Adversely Affected
We provide workers compensation coverage through a program that is partially
self-insured. If we become subject to substantial uninsured workers compensation
liabilities, our financial results may be adversely affected.
We Have a Substantial Amount of Goodwill on our Balance Sheet. A Substantial
Impairment of our Goodwill May Have the Effect of Decreasing Our Earnings or
Increasing Our Losses.
As of August 31, 2003, we had $33.1 million of unamortized goodwill on our
balance sheet, which represents the excess of the total purchase price of our
acquisitions over the fair value of the net assets acquired. At August 31, 2003,
goodwill represented 42.2% of our total assets.
Historically, we amortized goodwill on a straight-line basis over the estimated
period of future benefit of up to 25 years. In July 2001, the Financial
Accounting Standards Board issued SFAS No. 141, Business Combinations, and SFAS
No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001, as well as all purchase method business combinations
completed after June 30, 2001. SFAS No. 142 requires that, subsequent to January
1, 2002, goodwill not be amortized but rather that it be reviewed annually for
impairment. In the event impairment is identified, a charge to earnings would be
recorded. We have adopted the provisions of SFAS No. 141 and SFAS No. 142 as of
March 1, 2002. Although it does not affect our cash flow, an impairment charge
to earnings has the effect of decreasing our earnings. If we are required to
take a charge to earnings for goodwill impairment, our stock price could be
adversely affected.
Demand for Medical Staffing Services is Significantly Affected by the General
Level of Economic Activity and Unemployment in the United States.
When economic activity increases, temporary employees are often added before
full-time employees are hired. However, as economic activity slows, many
companies, including our hospital and healthcare facility clients, reduce their
use of temporary employees before laying off full-time employees. In addition,
we may experience more competitive pricing pressure during periods of economic
downturn. Therefore, any significant economic downturn could have a material
adverse impact on our condition and results of operations.
15
Business Conditions
Our business is dependent on the Company continuing to establish and maintain
close working relationships with physicians and physician groups, managed care
organizations, hospitals, clinics, nursing homes, social service agencies and
other health care providers. There can be no assurance that the Company will
continue to establish or maintain such relationships. The Company expects
additional competition will develop in future periods given the increasing
market demand for the type of services offered.
Attraction and Retention of Licensees and Employees
Maintaining quality licensees, managers and branch administrators will play a
significant part in the future success of the Company. The Company's
professional nurses and other health care personnel are also key to the
continued provision of quality care to patients of the Company's customers. The
possible inability to attract and retain qualified licensees, skilled management
and sufficient numbers of credentialed health care professional and
para-professionals and information technology personnel could adversely affect
the Company's operations and quality of service. Also, because the travel nurse
program is dependent upon the attraction of skilled nurses from overseas, such
program could be adversely affected by immigration restrictions limiting the
number of such skilled personnel who may enter and remain in the United States.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
Interest Rate Sensitivity: The Company's primary market risk exposure is
interest rate risk. The Company's exposure to market risk for changes in
interest rates relates to its debt obligations under its Facility described
above. Under the Facility, the interest rate is 4.55% over LIBOR. At August 31,
2003, drawings on the Facility were $21.5 million. Assuming variable rate debt
at August 31, 2003, a one point change in interest rates would impact annual net
interest payments by $215,000. The Company does not use derivative financial
instruments to manage interest rate risk.
ITEM 4. CONTROLS AND PROCEDURES
Within the 90-day period prior to the filing of this report, the Company carried
out, under the supervision and with the participation of the Company's
management, including the Chief Executive Officer and Chief Financial Officer,
an evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures as defined in the Exchange Act Rules
13a-14(c) and 15d-14(c). Based on that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that the Company's disclosure controls and
procedures were effective as of the date of that evaluation. There have been no
significant changes in internal controls, or in other factors that could
significantly affect internal controls, subsequent to the date the Chief
Executive Officer and Chief Financial Officer completed their evaluation.
16
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - See Note 8 in PART I. - ITEM 1.
- -----------------------------------------------------------
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- -----------------------------------------------------------
(A) The Company held its annual meeting of Shareholders on August 12, 2003
(B) The shareholders voted on and elected the following directors as follows:
NOMINEE FOR WITHELD
----------------------------------------------------
David Savitsky 24,080,414 1,443,012
Jonathan Halpert 24,056,498 1,466,928
The following directors who were not up for election will continue in office:
Stephen Savitsky
Donald Meyers
Bernard Firestone
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(A) Exhibits
Exhibit 31 - Certifications
===========================
Exhibit 32 - Section 1350 Certifications
========================================
(B) Reports on Form 8-K
The Company filed a current report on Form 8-K on June 2, 2003 to
furnish its press release reporting results for the Fourth Quarter ended
February 28, 2003.
The Company filed a current report on Form 8-K on June 18, 2003 to
furnish its press release reporting that the Company had renegotiated
it's debt with noteholders.
The Company filed a current report on Form 8-K on June 23, 2003 to
furnish its press release announcing it has signed a managerial
agreement with Travel Choice Staffing Inc.
The Company filed a current report on Form 8-K on July 15, 2003 to
furnish its press release reporting results for the first quarter for
the fiscal year ended February 29, 2004.
17
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: October 14, 2003 ATC HEALTHCARE, INC.
By: /s/ Andrew Reiben
--------------------
Andrew Reiben
Senior Vice President, Finance
Chief Financial Officer and
Treasurer (Authorized Officer
Principal Financial and Accounting Officer)
18