-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GdfvPbfKUZ9gJYrLdItqmTZ/dpUPSeFuTJoZacsMGe6Q4hLx3wfvjfoKtsh1IhrD +BIEWXt+an7aBIeud4bF2A== 0000950144-01-502477.txt : 20010516 0000950144-01-502477.hdr.sgml : 20010516 ACCESSION NUMBER: 0000950144-01-502477 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RAMSAY YOUTH SERVICES INC CENTRAL INDEX KEY: 0000773136 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOSPITALS [8060] IRS NUMBER: 630857352 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-13849 FILM NUMBER: 1639078 BUSINESS ADDRESS: STREET 1: ONE ALHAMBRA PLAZA COLUMBUS CENTER STREET 2: STE 750 CITY: CORAL GABLES STATE: FL ZIP: 33134 BUSINESS PHONE: 3055696993 MAIL ADDRESS: STREET 1: COLUMBUS CENTER STREET 2: ONE ALHAMBRA PLAZA STE 750 CITY: CORAL GABLES STATE: FL ZIP: 33134 FORMER COMPANY: FORMER CONFORMED NAME: RAMSAY HEALTH CARE INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: HEALTHCARE SERVICES OF AMERICA INC DATE OF NAME CHANGE: 19881120 10-Q 1 g69408e10-q.txt RAMSAY YOUTH SERVICES, INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR THE TRANSITION PERIOD FROM ______ TO ______ COMMISSION FILE NUMBER 0-13849 RAMSAY YOUTH SERVICES, INC. (Exact name of registrant as specified in its charter) DELAWARE 63-0857352 (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) COLUMBUS CENTER ONE ALHAMBRA PLAZA, SUITE 750 CORAL GABLES, FLORIDA 33134 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (305) 569-6993 Indicate by a 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 [ ]. The number of shares of the Registrant's Common Stock outstanding as of May 2, 2001, follows: Common Stock, par value $0.01 per share - 9,137,430 shares 2 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES FORM 10-Q INDEX
PAGE ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements.................................................................. 1 Condensed Consolidated Balance Sheets - March 31, 2001 and December 31, 2000..................................................................... 1 Condensed Consolidated Statements of Operations - Quarters ended March 31, 2001 and 2000............................................................... 3 Condensed Consolidated Statements of Cash Flows - Quarters ended March 31, 2001 and 2000......................................................................... 4 Notes to Condensed Consolidated Financial Statements - March 31, 2001.......................... 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................................................. 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk............................ 13 PART II. OTHER INFORMATION Item 1. Other Information..................................................................... 14 Item 2. Exhibits and Current Reports on Form 8-K.............................................. 15 SIGNATURES..................................................................................... 16
3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31, 2001 2000 -------------- --------------- (UNAUDITED) ASSETS Current assets Cash and cash equivalents................................... $1,075,000 $1,539,000 Accounts receivable, less allowances for doubtful accounts of $2,403,000 and $2,807,000 at March 31, 2001 and December 31, 2000, respectively........................................ 23,544,000 22,368,000 Amounts due from third-party contractual agencies........... 1,135,000 1,164,000 Other receivables........................................... 739,000 602,000 Other current assets........................................ 2,476,000 2,323,000 -------------- --------------- Total current assets...................................... 28,969,000 27,996,000 Other assets Cash held in trust.......................................... 1,012,000 1,041,000 Cost in excess of net asset value of purchased businesses, net........................................... 2,495,000 2,548,000 Unamortized loan costs, net................................. 1,328,000 1,415,000 Net assets held for sale.................................... 2,131,000 2,129,000 -------------- --------------- Total other assets........................................ 6,966,000 7,133,000 Property and equipment Land........................................................ 4,666,000 4,666,000 Buildings and improvements.................................. 36,732,000 36,351,000 Equipment, furniture and fixtures........................... 11,883,000 11,698,000 -------------- --------------- 53,281,000 52,715,000 Less accumulated depreciation............................... 18,792,000 18,246,000 -------------- --------------- 34,489,000 34,469,000 -------------- --------------- $70,424,000 $69,598,000 ============== ===============
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. 1 4 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31, 2001 2000 --------------- --------------- (UNAUDITED) LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable............................................ $7,151,000 $7,606,000 Accrued salaries and wages.................................. 5,864,000 4,284,000 Other accrued liabilities................................... 1,280,000 1,343,000 Amounts due to third-party contractual agencies............. 3,830,000 3,632,000 Current portion of long-term debt........................... 2,924,000 2,803,000 --------------- --------------- Total current liabilities................................. 21,049,000 19,668,000 Noncurrent liabilities Other accrued liabilities................................... 4,049,000 4,389,000 Long-term debt, less current portion........................ 24,095,000 24,708,000 --------------- --------------- Total liabilities......................................... 49,193,000 48,765,000 --------------- --------------- Commitments and contingencies Stockholders' equity Common stock $.01 par value--authorized 30,000,000 shares; issued 9,137,430 shares at March 31, 2001 and 9,121,180 shares at December 31, 2000............................... 91,000 91,000 Additional paid-in capital.................................. 127,038,000 127,024,000 Accumulated deficit......................................... (101,999,000) (102,383,000) Treasury stock--193,850 common shares at March 31, 2001 and December 31, 2000, at cost................................ (3,899,000) (3,899,000) --------------- --------------- Total stockholders' equity.......................... 21,231,000 20,833,000 --------------- --------------- $70,424,000 $69,598,000 =============== ===============
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. 2 5 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
QUARTER ENDED MARCH 31, ----------------------------------- 2001 2000 ---------------- ---------------- REVENUES....................................................... $31,789,000 $23,457,000 Operating Expenses: Salaries, wages and benefits................................ 19,827,000 14,687,000 Other operating expenses.................................... 8,992,000 6,931,000 Provision for doubtful accounts............................. 832,000 581,000 Depreciation and amortization............................... 593,000 590,000 ---------------- ---------------- TOTAL OPERATING EXPENSES....................................... 30,244,000 22,789,000 ---------------- ---------------- Income from operations......................................... 1,545,000 668,000 Non-operating income (expenses): Investment and other income................................. -- 28,000 Interest and other financing charges........................ (985,000) (494,000) ---------------- ---------------- Total non-operating income (expenses), net................ (985,000) (466,000) INCOME BEFORE INCOME TAXES..................................... 560,000 202,000 Provision for income taxes..................................... 176,000 42,000 ---------------- ---------------- NET INCOME..................................................... $384,000 $160,000 ================ ================ Income attributable to common stockholders..................... $384,000 $160,000 ================ ================ Income per common share: Basic....................................................... $.04 $.02 ================ ================ Diluted..................................................... $.04 $.02 ================ ================ Weighted average number of common shares outstanding: Basic....................................................... 8,929,000 8,895,000 ================ ================ Diluted..................................................... 8,929,000 9,003,000 ================ ================
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. 3 6 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
QUARTER ENDED MARCH 31, ------------------------------------ 2001 2000 ---------------- ---------------- Cash flows from operating activities: Net income.................................................. $384,000 $160,000 Adjustments to reconcile net income to net cash used in operating activities: Depreciation.............................................. 546,000 468,000 Amortization, including loan costs........................ 236,000 196,000 Provision for doubtful accounts........................... 832,000 581,000 Change in operating assets and liabilities: Accounts receivable..................................... (2,008,000) (1,798,000) Other current assets.................................... (261,000) 1,385,000 Accounts payable........................................ (455,000) (2,365,000) Accrued salaries, wages and other accrued liabilities... 1,177,000 192,000 Amounts due to third-party contractual agencies......... 198,000 283,000 ---------------- ---------------- Total adjustments..................................... 265,000 (1,058,000) ---------------- ---------------- Net cash provided by (used in) operating activities. 649,000 (898,000) ---------------- ---------------- Cash flows from investing activities: Increase in net assets held for sale........................ (2,000) (33,000) Expenditures for property and equipment..................... (566,000) (394,000) Acquisitions................................................ -- (149,000) Cash held in trust.......................................... 30,000 -- ---------------- ---------------- Net cash used in investing activities............... (538,000) (576,000) ---------------- ---------------- Cash flows from financing activities: Loan costs.................................................. (2,000) (326,000) Proceeds from issuance of debt and warrants................. 89,000 5,149,000 Payments on debt............................................ (676,000) (2,375,000) Net proceeds from exercise of options and stock purchases... 14,000 24,000 Registration costs.......................................... -- (18,000) ---------------- ---------------- Net cash (used in) provided by financing activities. (575,000) 2,454,000 ---------------- ---------------- Net (decrease) increase in cash and cash equivalents........... (464,000) 980,000 Cash and cash equivalents at beginning of period............... 1,539,000 622,000 ---------------- ---------------- Cash and cash equivalents at end of period..................... $1,075,000 $1,602,000 ================ ================ Cash paid during the period for: Interest.................................................... $813,000 $422,000 ================ ================ Income taxes................................................ $211,000 $889,000 ================ ================
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. 4 7 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) MARCH 31, 2001 NOTE 1. BASIS OF PRESENTATION The Company is a provider and manager of juvenile justice and behavioral healthcare programs and services for at-risk and troubled youth in residential and non-residential settings nationwide. The Company offers its full spectrum of education, treatment and community based programs and services in Alabama, Florida, Hawaii, Missouri, Michigan, Nevada, North Carolina, South Carolina, Texas, Utah and the Commonwealth of Puerto Rico. The Company also provides a limited range of adult behavioral services at certain of its locations in response to community demand. The accompanying unaudited condensed 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 notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of the interim information are, unless otherwise discussed in this report, of a normal recurring nature and have been included. The Company's business is seasonal in nature and subject to general economic conditions and other factors. Accordingly, operating results for the quarter ended March 31, 2001 are not necessarily indicative of the results that may be expected for the year. The balance sheet at December 31, 2000 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2000. On August 4, 2000, the Company acquired the operating assets of Charter Behavioral Health System of Manatee Palms, L.P. ("Manatee Palms") from Charter Behavioral Health Systems, LLC and the corresponding real estate from Crescent Real Estate Funding VII, L.P. for a cash purchase price of $7,700,000. The acquisition was accounted for under the purchase method of accounting. In connection with the acquisition, the Company recorded cost in excess of net asset value of purchased businesses of $1,892,000. This amount is being amortized on a straight-line basis over a term of 20 years. The operations of Manatee Palms have been included in the Company's consolidated statement of operations effective August 4, 2000. The Company's Senior Credit Facility was amended on August 4, 2000 to provide for the approval of this acquisition. NOTE 2. LONG-TERM DEBT The Company's long-term debt is as follows:
MARCH 31, DECEMBER 31, 2001 2000 ---------------- ---------------- Variable rate Term Loan, due October 30, 2003....... $10,002,000 $10,597,000 Revolver, due October 30, 2003...................... 5,676,000 5,586,000 Acquisition Loan, due October 30, 2003.............. 2,084,000 2,162,000 Subordinated Note (net of discount of $375,000 and $421,000), due January 24, 2007.................. 4,625,000 4,579,000 Subordinated Note (net of discount of $392,000 and $440,000), due January 24, 2007.................. 4,608,000 4,560,000 Other .............................................. 24,000 27,000 ---------------- ---------------- 27,019,000 27,511,000 Less current portion................................ 2,924,000 2,803,000 ---------------- ---------------- $24,095,000 $24,708,000 ================ ================
5 8 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES The Company's senior credit facility (the "Senior Credit Facility") was amended on August 4, 2000 to provide for the acquisition of Manatee Palms. The amended Senior Credit Facility consists of (i) a term loan (the "Term Loan") payable in monthly installments ranging from $83,000 to $302,000 with a final installment of $2,100,000 due on October 30, 2003, (ii) a revolving credit facility (the "Revolver") for an amount up to the lesser of $12,000,000 or the borrowing base of the Company's receivables (as defined in the agreement) and (iii) an acquisition loan commitment of up to $6,000,000 (the "Acquisition Loan"). The Company's amended Senior Credit Facility also provided for a $1,250,000 bridge loan advance under the Acquisition Loan. The bridge loan advance is payable on the occurrence of certain events (as defined in the agreement). In connection with the aforementioned bridge loan advance, a corporate affiliate of Paul J. Ramsay, Chairman of the Board of the Company, entered into a Junior Subordinated Note Purchase Agreement with the Senior Credit Facility lender to participate in the Senior Credit Facility in an amount equal to the bridge loan advance. The Company failed to maintain the required senior debt fixed charged coverage and leverage ratios as of December 31, 2000. The Company's senior lender agreed to waive these requirements as of December 31, 2000. Effective March 31, 2001, the Company's Senior Credit Facility was amended (the "Seventh Amendment"). Under the Seventh Amendment, certain coverage and leverage ratios required to be met by the Company were revised. As of March 31, 2001, the Company is in compliance with all senior debt covenants under the Seventh Amendment. On April 14, 2001, the Company's subordinated debt agreement was amended (the "Second Amendment"). Under the Second Amendment, certain coverage and leverage ratios required to be met by the Company were revised retroactive to March 31, 2001. As of March 31, 2001, the Company is in compliance with all subordinated debt covenants. NOTE 3. EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share:
QUARTER ENDED MARCH 31, ------------------------------------ 2001 2000 ---------------- ---------------- (unaudited) (unaudited) Numerator: Numerator for basic earnings per share - income attributable to common stockholders................................. $384,000 $160,000 Effect of dilutive securities.............................. -- -- ---------------- ---------------- -- -- ---------------- ---------------- Numerator for diluted earnings per share - income attributable to common stockholders after assumed conversions............................................ $384,000 $160,000 ================ ================ Denominator: Denominator for basic earnings per share - weighted-average shares................................................... 8,929,000 8,895,000 Effect of dilutive securities: Employee stock options and warrants...................... -- 108,000 ---------------- ---------------- Dilutive potential common shares........................... -- 108,000 ---------------- ---------------- Denominator for diluted earnings per share - adjusted weighted-average shares and assumed conversions........ 8,929,000 9,003,000 ================ ================ Basic earnings per share...................................... $.04 $.02 ================ ================ Diluted earnings per share.................................... $.04 $.02 ================ ================
6 9 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES For the quarter ended March 31, 2001 and 2000, respectively, 1,792,947 and 2,917,739 options and warrants were excluded from the above computation because their effect would be antidilutive. NOTE 4. SEGMENT INFORMATION During the year ended December 31, 2000, the Company refined its segment definitions to better reflect its business operations and management responsibilities. The Company now manages its youth service operations under its juvenile justice and behavioral healthcare operating segments. Additionally, management evaluates the business by geographic area within each segment. Accordingly, the corresponding information for earlier periods has been reclassified to correspond with the new operating segments. The Company's juvenile justice programs provide care, custody, control and treatment of committed delinquent youth. These programs focus on solving the specialized needs of governmental agencies by providing effective treatment interventions, including counseling, social interests, substance abuse education and treatment, mental health services, cognitive and life skills development, accredited education and vocational skills. The focus of these services is the re-integration of youth into the family and community, crisis intervention and aftercare. The Company's behavioral healthcare programs consist of residential treatment programs, therapeutic community living facilities, acute inpatient services and community-based programs. The residential treatment programs provide safe, secure and highly structured environments for the evaluation and development of long-term, intensive and transitional treatment services. The therapeutic community living facilities provide shelter care for youth in a community setting, usually in a residential neighborhood. Acute inpatient services are generally provided to individuals needing the most intensive behavioral healthcare treatment. The community-based programs are designed to meet the special needs of youth and their families, while enabling them to remain living at home or in their community. Many of the Company's programs and services provide specialized educational services designed to modify disruptive behavior and assist students to develop the academic and social skills necessary for them to participate successfully in society. The following table set forth, for each of the periods indicated, certain information about segment results of operations and segment assets. There are no inter-segment sales or transfers. Segment profit consists of revenue less operating expenses, and does not include investment income and other, interest and other financing charges, non-recurring items and income taxes. Total assets are those assets used in the operations in each segment. Corporate assets include cash and cash equivalents, property and equipment, intangible assets and notes receivable. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. QUARTER ENDED MARCH 31, ----------------------------- 2001 2000 -------------- -------------- SEGMENT REVENUE Behavioral healthcare.................... $23,574,000 $19,389,000 Juvenile justice......................... 8,215,000 4,068,000 -------------- -------------- Total consolidated revenues................. $31,789,000 $23,457,000 ============== ============== 7 10 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES QUARTER ENDED MARCH 31, --------------------------- 2001 2000 ------------ ------------ SEGMENT DEPRECIATION AND AMORTIZATION Behavioral healthcare ......................... $ 454,000 $ 376,000 Juvenile justice .............................. 102,000 92,000 ------------ ------------ 556,000 468,000 Reconciling items Corporate depreciation and amortization ....... 37,000 122,000 ------------ ------------ Total consolidated depreciation and amortization . $ 593,000 $ 590,000 ============ ============ Segment profit Behavioral healthcare ......................... $ 2,285,000 $ 1,857,000 Juvenile justice .............................. 862,000 380,000 ------------ ------------ 3,147,000 2,237,000 Reconciling items Corporate expenses ............................ (1,602,000) (1,569,000) Investment income and other ................... -- 28,000 Interest and other financing charges .......... (985,000) (494,000) ------------ ------------ Total consolidated income before income taxes .... $ 560,000 $ 202,000 ============ ============ Segment capital expenses Behavioral healthcare ......................... $ 336,000 $ 454,000 Juvenile justice .............................. 200,000 69,000 ------------ ------------ 536,000 523,000 Reconciling items Corporate assets .............................. 28,000 20,000 Assets held for sale ........................... 2,000 33,000 ------------ ------------ Total consolidated capital expenditures .......... $ 566,000 $ 576,000 ============ ============ SEGMENT ASSETS Juvenile justice .............................. $ 12,905,000 $ 6,644,000 Behavioral healthcare ......................... 54,605,000 46,625,000 ------------ ------------ Total segment assets ............................. 67,510,000 53,269,000 RECONCILING ITEMS Corporate assets .............................. 2,914,000 4,407,000 ------------ ------------ Total consolidated assets ........................ $ 70,424,000 $ 57,676,000 ============ ============ NOTE 5. ACCOUNTS RECEIVABLE The Company has experienced delays in the collection of receivables from its contracts in Puerto Rico. As of March 31, 2001, the Company had approximately $5,180,000 in outstanding receivables due from the Commonwealth of Puerto Rico, of which $1,485,000 was over 120 days past due. As of May 9, 2001, the Company had collected approximately $1,357,000 of the outstanding receivable balance and had established reserves of $362,000 against the remaining balance. The Company and its advisors are in active discussions with the Government of Puerto Rico with respect to the payment of the outstanding receivables. The Company believes that it has fully performed its obligations under the Puerto Rico contracts and is entitled to receive payment of these receivables in full. Although the Company has been advised by its legal counsel that the net receivables due on the Puerto Rico contracts are collectable, there can be no assurances that future transactions or events will not result in the need for additional reserves for these accounts receivable. If the Company were to record additional reserves, it would adversely affect earnings in the period in which the reserves are recorded. 8 11 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company receives revenues primarily from the delivery of diversified education, treatment and community based programs and services for at-risk and troubled youth in residential and non-residential settings. The Company receives revenues based on per diem rates, fixed fee contracts or flat or cost-based rate contracts. In addition, the Company also receives revenues from management consulting contracts with other entities. Revenues under the Company's programs are recognized as services are rendered. Revenues of the Company's programs and services are affected by changes in the rates the Company charges, changes in reimbursement rates by third-party payors, the volume of individuals treated and changes in the mix of payors. Salaries, wages and benefits include facility and program payrolls and related taxes, as well as employee benefits, including insurance and workers' compensation coverage. Employee compensation and benefits also includes general and administrative payroll and related benefit costs, including salaries and supplemental compensation of officers. Other operating expenses include all expenses not otherwise presented separately in the Company's statements of operations. Significant components of these expenses at the operating level include items such as food, utilities, supplies, rent and insurance. Significant components of these expenses at the administrative level include legal, accounting, investor relations, marketing, consulting and travel expense. The Company's quarterly results may fluctuate significantly as a result of a variety of factors, including the timing of the opening of new programs. When the Company opens a new program, the program may be unprofitable until the program's population, and net revenues contributed by the program, approach intended levels, primarily because the Company staffs its programs in anticipation of achieving such levels. The Company's quarterly results may also be impacted by seasonality, as revenues generated by youth education and treatment services are generally seasonal in nature. IN CONNECTION WITH THE "SAFE-HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, THE COMPANY NOTES THAT THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS ABOUT THE COMPANY. THE COMPANY IS HEREBY SETTING FORTH CAUTIONARY STATEMENTS IDENTIFYING IMPORTANT FACTORS THAT MAY CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE SET FORTH IN ANY FORWARD-LOOKING STATEMENTS OR INFORMATION MADE BY OR ON BEHALF OF OR CONCERNING THE COMPANY. SOME OF THE MOST SIGNIFICANT FACTORS INCLUDE (I) ACCELERATING CHANGES OCCURRING IN THE AT-RISK YOUTH INDUSTRY, INCLUDING COMPETITION FROM CONSOLIDATING AND INTEGRATED PROVIDER SYSTEMS AND LIMITATIONS ON REIMBURSEMENT RATES, (II) FEDERAL AND STATE GOVERNMENTAL BUDGETARY CONSTRAINTS WHICH COULD HAVE THE EFFECT OF LIMITING THE AMOUNT OF FUNDS AVAILABLE TO SUPPORT GOVERNMENTAL PROGRAMS, (III) STATUTORY, REGULATORY AND ADMINISTRATIVE CHANGES OR INTERPRETATIONS OF EXISTING STATUTORY AND REGULATORY PROVISIONS AFFECTING THE CONDUCT OF THE COMPANY'S BUSINESS AND AFFECTING CURRENT AND PRIOR REIMBURSEMENT FOR THE COMPANY'S SERVICES AND (IV) THE COMPANY'S INABILITY TO SUCCESSFULLY IMPLEMENT ITS NEW STRATEGIC DIRECTION OF PROVIDING TREATMENT AND EDUCATION PROGRAMS FOR AT-RISK AND TROUBLED YOUTH, AND (V) UNCERTAINTIES REGARDING ISSUES IN THE PUERTO RICO MARKET SERVICED BY THE COMPANY. THERE CAN BE NO ASSURANCE THAT ANY ANTICIPATED FUTURE RESULTS WILL BE ACHIEVED. AS A RESULT OF THE FACTORS IDENTIFIED ABOVE AND INCLUDING ANY OTHER FACTORS, THE COMPANY'S ACTUAL RESULTS OR FINANCIAL OR OTHER CONDITION COULD VARY SIGNIFICANTLY FROM THE PERFORMANCE OR EXPECTATION SET FORTH IN ANY FORWARD-LOOKING STATEMENTS OR INFORMATION. 9 12 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS JUVENILE JUSTICE SEGMENT The following table states for the period indicated our juvenile justice and percentage of revenue terms (in thousands):
QUARTER ENDED --------------------------------------------------- 2001 2000 ------------------------- ------------------------- Revenues.................................. $8,215 100.0% $4,068 100.0% Expenses: Salaries, wages and benefits........... 5,316 64.7% 2,651 65.2% Other operating expenses............... 1,871 22.8% 923 22.7% Provision for doubtful accounts........ 64 0.8% 22 0.5% Depreciation and amortization.......... 102 1.2% 92 2.2% ------------ ------------ ------------ ------------ Total operating expenses............. 7,353 89.5% 3,688 90.7% ------------ ------------ ------------ ------------ Income (loss) from operations............. $862 10.5% $380 9.3% ============ ============ ============ ============
REVENUES Juvenile justice revenues increased from $4.1 million in the quarter ended March 31, 2000 to $8.2 million in the quarter ended March 31, 2001. The increase of $4.1 million in revenues from 2000 to 2001 is primarily a result of an increase in revenues of $1.9 million from new programs awarded to the Company, the acquisition of Manatee Palms in August 2000 and the full quarter effect of programs initiated by the Company, during the quarter ended March 31, 2000. SALARIES, WAGES AND BENEFITS Juvenile justice salaries, wages and benefits increased from $2.7 million in the quarter ended March 31, 2000 to $5.3 million in the quarter ended March 31, 2001. The decrease as a percentage of revenues is primarily due to the Manatee Palms acquisition. Salaries, wages and benefits as a percentage of revenues for the Manatee Palms facilities are lower than the Company's other Juvenile Justice programs. OTHER OPERATING EXPENSES Juvenile justice other operating expenses increased from $0.9 million in the quarter ended March 31, 2000 to $1.9 million in the quarter ended March 31, 2001. Other operating expenses during the quarter ended March 31, 2001 did not fluctuate significantly as a percentage of revenue when compared to the same period in the prior year. PROVISION FOR DOUBTFUL ACCOUNTS Juvenile justice provision for doubtful accounts increased as a percentage of revenue from 0.5% in the quarter ended March 31, 2000 to 0.8% in the quarter ended March 31, 2001 primarily as a result of increases in reserves in the Puerto Rico market. DEPRECIATION AND AMORTIZATION The growth in the Company's Juvenile Justice programs has been primarily in contracts which have been awarded to the Company with the right to occupy a building owned by the payor source. As a result, depreciation and amortization as a percentage of revenues has decreased when compared to the same period as last year. 10 13 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES BEHAVIORAL HEALTHCARE SEGMENT
QUARTER ENDED --------------------------------------------------- 2001 2000 ------------------------- ------------------------- Revenues.................................. $23,574 100.0% $19,389 100.0% Expenses: Salaries, wages and benefits........... 13,730 58.2% 11,382 58.7% Other operating expenses............... 6,337 26.9% 5,214 26.9% Provision for doubtful accounts........ 768 3.3% 560 2.9% Depreciation and amortization.......... 454 1.9% 376 1.9% ------------ ------------ ------------ ------------ Total operating expenses............. 21,289 90.3% 17,532 90.4% ------------ ------------ ------------ ------------ Income (loss) from operations............. $2,285 9.7% $1,857 9.6% ============ ============ ============ ============
REVENUES Behavioral healthcare revenues increased form $19.4 million in the quarter ended March 31, 2000 to $23.6 million in the quarter ended March 31, 2001. The increase of $4.2 million in revenues from 2000 to 2001 is primarily a result of (i) an increase in revenues of $0.9 million from new programs, (ii) an increase in revenues of $1.7 million from the acquisition of Manatee Palms facility and (iii) an increase of $1.6 million in the Company's other behavioral healthcare facilities primarily due to a total increase in census of 9.4% between periods (from 55,345 days during the quarter ended March 31, 2000 to 60,550 days during the quarter ended March 31, 2001). SALARIES, WAGES AND BENEFITS Behavioral healthcare salaries, wages and benefits were $11.4 million, or 58.7% of behavioral healthcare revenues for the quarter ended March 31, 2000, compared to $13.7 million, or 58.2% of behavioral healthcare revenues for the quarter ended March 31, 2001. The decrease as a percentage of revenues is primarily due to the Manatee Palms acquisition. Salaries, wages and benefits as a percentage of revenues of the Manatee Palm facility is lower than the Company's other Behavioral healthcare programs. OTHER OPERATING EXPENSES Behavioral healthcare other operating expenses were $5.2 million or 26.9% of behavioral healthcare revenues for the quarter ended March 31, 2000, compared to $6.3 million, or 26.9% of behavioral healthcare revenues for the quarter ended March 31, 2001. Other operating expenses during the quarter ended March 31, 2001 did not fluctuate as a percentage of revenue when compared to the same period in the prior year. PROVISION FOR DOUBTFUL ACCOUNTS Behavioral healthcare provision for doubtful accounts were $0.6 million or 2.9% of behavioral healthcare revenues for the quarter ended March 31, 2000, compared to $0.8 million, or 3.3% of behavioral healthcare revenues for the quarter ended March 31, 2001. The increase as a percentage of behavioral healthcare revenues was primarily a result of the recording of reserves in the Puerto Rico market. DEPRECIATION AND AMORTIZATION Behavioral healthcare depreciation and amortization was $0.4 million or 1.9% of behavioral healthcare revenues for the quarter ended March 31, 2000, compared to $0.5 million, or 1.9% of behavioral healthcare revenues for the quarter ended March 31, 2001. Depreciation and amortization during the quarter ended March 31, 2001 did not fluctuate as a percentage of revenue when compared to the same period in the prior year. 11 14 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES CORPORATE AND OTHER
QUARTER ENDED --------------------------------------------------- 2001 2000 ------------------------- ------------------------- Revenues: Juvenile justice....................... $8,215 $4,068 Behavioral healthcare.................. 23,574 19,389 ------------ ------------ Total revenues....................... $31,789 100.0% $23,457 100.0% Expenses: Salaries, wages and benefits........... 781 2.5% 655 2.8% Other operating expenses............... 784 2.5% 792 3.4% Depreciation and amortization.......... 37 0.1% 122 0.5% Investment and other income............ -- 0.0% 28 0.1% Investment and other financing charges. 985 3.1% 494 2.1% Provision for income taxes............. 176 0.6% 42 0.2%
SALARIES, WAGES AND BENEFITS Corporate office salaries, wages and benefits were $0.8 million or 2.5% of total consolidated revenues for the quarter ended March 31, 2001, compared to $0.7 million or 2.8% of total consolidated revenues for the same period in 2000. The decrease as a percentage of total consolidated revenues is primarily due to the increase in total consolidated revenues of $8.3 million during the quarter. OTHER OPERATING EXPENSES Corporate office other operating expenses were $0.8 million or 2.5% of total consolidated revenues for the quarter ended March 31, 2001, compared to $0.8 million or 3.4% of total consolidated revenues for the same period in 2000. The decrease as a percentage of total consolidated revenues is primarily due to the increase in total consolidated revenues of $8.3 million during the quarter. DEPRECIATION AND AMORTIZATION Corporate office depreciation and amortization was $0.04 million or 0.1% of total consolidated revenues for the quarter ended March 31, 2001, compared to $0.1 million or 0.5% of total consolidated revenues for the same period in 2000. The decrease is due to the Company's completion of the amortization of certain projects during the fiscal year ended December 31, 2000. INTEREST AND OTHER FINANCING CHARGES Interest and other financing charges increase from $0.5 million for the quarter ended March 31, 2000 to $1.0 million for the quarter ended March 31, 2001. The increase in interest and other financing charges is primarily attributable to an increase in the Company's average outstanding borrowings between quarters. PROVISION FOR INCOME TAXES For both periods presented, the provision for income taxes was recorded at an effective tax rate significantly less than the statutory tax rate due to the Company's significant net operating loss carryovers. LIQUIDITY AND CAPITAL RESOURCES At March 31, 2001 and December 31, 2000, the Company had $7.9 million and $8.3 million, respectively, in working capital and $1.1 million and $1.5 million, respectively, in cash and cash equivalents. The Company's principal 12 15 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES sources of liquidity as of March 31, 2001 and December 31, 2000 consisted primarily of the aforementioned cash and cash equivalents and accounts receivable of $23.5 million and $22.4 million, respectively. Net cash provided by operating activities increased by $1.5 million from the quarter ended March 31, 2000 results. During the quarter ended March 31, 2000, accounts payable decreased by $2.4 million, primarily contributing to net cash used in operating activities of $0.9 million for the quarter ended March 31, 2000. During 2001, accrued salaries and other accrued liabilities increased by $1.2 million, primarily contributing to net cash provided by operating activities of $0.6 million for the quarter ended March 31, 2001. Cash used in investing activities was $0.5 million for the quarter ended March 31, 2001 compared to cash used in investing activities of $0.6 million for the quarter ended March 31, 2000. The fluctuation is primarily a result of an acquisition of a group home for $0.1 million in the quarter ended March 31, 2000. Net cash used in financing activities decreased $3.0 million from the quarter ended March 31, 2000 results. During 2000, net cash provided by financing activities totaled $2.4 million, due primarily to net debt proceeds of $2.8 million. During 2001, net cash used in financing activities totaled $0.6 million, due primarily to net debt payments of $0.6 million. The Company has experienced delays in the collection of receivables from its contracts in Puerto Rico. As of March 31, 2001, the Company had approximately $5,180,000 in outstanding receivables due from the Commonwealth of Puerto Rico, of which $1,485,000 was over 120 days past due. As of May 9, 2001, the Company had collected approximately $1,357,000 of the outstanding receivable balance and had established reserves of $362,000 against the remaining balance. The Company and its advisors are in active discussions with the Government of Puerto Rico with respect to the payment of the outstanding receivables. The Company believes that it has fully performed its obligations under the Puerto Rico contracts and is entitled to receive payment of these receivables in full. Although the Company has been advised by its legal counsel that the net receivables due on the Puerto Rico contracts are collectable, there can be no assurances that future transactions or events will not result in the need for additional reserves for these accounts receivable. If the Company were to record additional reserves, it would adversely affect earnings in the period in which the reserves are recorded. Management of the Company believes that it can meet its current cash requirements and future identifiable needs with internally generated funds from operations and availability in its Senior Credit Facility. If the Company is unable to collect the Puerto Rico receivables, the Company may need to obtain liquidity through other sources of debt or equity. Although the Company believes that it has the ability to raise such additional liquidity, there can be no assurances that the Company will be able to raise debt or equity capital through other sources, or if obtained, that it will be on terms acceptable to the Company. The incurring or assumption by the Company of additional indebtedness could result in the issuance of additional equity and/or debt which could have a dilutive effect on current shareholders and a significant effect on the Company's operations. As of October 13, 2000, the Company's common stock was transferred from the NASDAQ National Market System and commenced trading on the NASDAQ SmallCap Market. On April 4, 2001, NASDAQ notified the Company that its common stock had failed to maintain a minimum bid price of $1.00 over a 30 consecutive trading day period, as required by The NASDAQ SmallCap Market rules. Failure to maintain a minimum $1.00 bid price could result in a delisting of the Company's common stock. The Company was provided 90 calendar days to regain compliance. At March 31, 2001, the Company's stock was trading below the $1.00 minimum bid price, however, as of the date of this filing, the Company's common stock has maintained a bid price of over $1.00 for more than 10 consecutive trading days. There can be no assurance that the Company's common stock will continue to trade above the minimum bid price of $1.00 or that it will continue to be listed on the Nasdaq SmallCap Market. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK While the Company is exposed to changes in interest rates as a result of its outstanding variable rate debt, the Company does not currently utilize any derivative financial instruments related to its interest rate exposure. The Company believes that its exposure to market risk will not result in a material adverse effect on the Company's consolidated financial condition, results of operations or liquidity. 13 16 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION ITEM 1. OTHER INFORMATION The Company is party to certain claims, suits and complaints, whether arising from the acts or omissions of its employees, providers or others, which arise in the ordinary course of business. The Company has established reserves at March 31, 2001 for the estimated amounts which might be recovered from the Company as a result of all outstanding legal proceedings. In the opinion of management, the ultimate resolution of these pending legal proceedings is not expected to have a material adverse effect on the Company's financial position, results of operations or liquidity. 14 17 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES ITEM 2. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits The Exhibits required to be filed as part of this Quarterly Report on Form 10-Q are as follows: Exhibit 10.149 Seventh Amendment to Loan and Security Agreement dated as of March 31, 2001 by and among the Company, the subsidiaries of the Company and Fleet Capital Corporation, as agent and lender.................... Exhibit 10.150 Second Amendment to Amended and Restated Subordinated Note and Warrant Purchase Agreement and First Amendment to Amended and Restated Subordination Agreement dated as of April 16, 2001 by and among the Company, the subsidiaries of the Company listed on the signature pages hereto, as Guarantors, SunTrust Banks, Inc., and ING (U.S.) Capital, LLC as Purchasers.......................................... Exhibit 11 Computation of Net Income (Loss) Per Share............................................... Exhibit 99.18 Press Release dated March 30, 2001.................. (b) Current Reports on Form 8-K The Company did not file any Current Reports on Form 8-K during the quarter ended March 31, 2001. 15 18 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES 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 thereupon duly authorized. RAMSAY YOUTH SERVICES, INC. Registrant /s/ MARCIO C. CABRERA ----------------------------------- Marcio C. Cabrera Executive V.P. and Chief Financial Officer Date: May 14, 2001 16 EX-10.149 2 g69408ex10-149.txt 7TH AMENDMENT TO LOAN SECURITY AGREEMENT 1 EXHIBIT 10.149 SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND WAIVER This Seventh Amendment to Loan and Security Agreement and Waiver (this "SEVENTH AMENDMENT") is entered into as of the 31st day of March, 2001, between RAMSAY YOUTH SERVICES, INC., a Delaware corporation, f/k/a RAMSAY HEALTH CARE, INC. ("HOLDINGS"), with its principal place of business at Columbus Center, One Alhambra Plaza, Suite 750, Coral Gables, Florida 33134, each of the Subsidiaries of Holdings party to this Sixth Amendment and listed in EXHIBIT B to the Loan Agreement referred to below (the "HOLDINGS SUBSIDIARIES"), each of which is a corporation or other legal entity as indicated in EXHIBIT B, is organized under the laws of the jurisdiction indicated in EXHIBIT B, and has its principal place of business at the location indicated in EXHIBIT B (Holdings, the Holdings Subsidiaries, and each other Subsidiary of Holdings or of any Subsidiary of Holdings from time to time party to the Loan Agreement referred to below are hereinafter collectively referred to as "BORROWERS" and each individually as a "BORROWER"), and FLEET CAPITAL CORPORATION, a Rhode Island corporation (in its individual capacity, "FCC"), with offices at 5950 Sherry Lane, Suite 300, Dallas, Texas 75225, as a Lender, and as agent for all Lenders, in such capacity, "AGENT"), and such Persons who are or hereafter become parties to the Loan Agreement as Lenders. Capitalized terms used but not defined in this Seventh Amendment have the meanings assigned to them in Appendix A of that certain Loan and Security Agreement dated October 30, 1998, among Borrowers, Lenders and Agent, as amended (the "LOAN AGREEMENT"). W I T N E S S E T H: WHEREAS, Events of Default exist pursuant to SECTION 10.1.3 of the Loan Agreement as a result of Holdings' failure, on a Consolidated basis, (i) to maintain a Fixed Charge Coverage Ratio of 1.15 to 1.0 for the twelve calendar month period ending on December 31, 2000, as required pursuant to SECTION 8.3.1 of the Loan Agreement and (ii) to maintain Total Indebtedness to EBITDA of 3.50 to 1.0 for the twelve calendar month period ending on December 31, 2000, as required pursuant to SECTION 8.3.3 of the Loan Agreement (collectively, the "EXISTING EVENTS OF DEFAULT"); and WHEREAS, Borrowers have requested that Agent and Lenders waive the Existing Events of Default and amend the Loan Agreement in certain respects; and WHEREAS, subject to the terms and conditions set forth herein, Agent and Lenders have agreed to Borrower's request to waive the Existing Events of Default and amend the Loan Agreement as set forth in this Seventh Amendment. NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, Borrowers, Agent and Lenders hereby agree as follows: SECTION 1. Subject to the satisfaction of each condition precedent set forth in SECTION 3 hereof and in reliance on the representations, warranties, 2 covenants and agreements contained in this Seventh Amendment, the Loan Agreement shall be amended effective as of March 31, 2001 (the "SEVENTH AMENDMENT EFFECTIVE DATE") in the manner provided in this SECTION 1: 1.1 AMENDED DEFINITIONS. The following definitions contained in APPENDIX A to the Loan Agreement shall be amended to read in their entirety as follows: EBITDA - WITH RESPECT TO ANY FISCAL PERIOD, EBIT PLUS DEPRECIATION AND AMORTIZATION EXPENSE FOR SUCH PERIOD; PROVIDED THAT, FOR THE PURPOSES OF CALCULATING COMPLIANCE WITH THE FIXED CHARGE RATIO REQUIRED BY SECTION 8.3.1, THE INTEREST COVERAGE RATIO REQUIRED BY SECTION 8.3.2 AND THE TOTAL INDEBTEDNESS TO EBITDA RATIO REQUIRED BY SECTION 8.3.3, TO THE EXTENT SUCH FISCAL PERIOD INCLUDES ANY OF THE FISCAL QUARTERS SET FORTH BELOW, THE FOLLOWING AMOUNTS SHALL BE ADDED TO HOLDINGS EBITDA FOR EACH SUCH FISCAL QUARTER INCLUDED IN SUCH FISCAL PERIOD: FISCAL QUARTER ENDING: AMOUNT: ---------------------- ------- JUNE 30, 2000 $194,000 SEPTEMBER 30, 2000 $233,000 DECEMBER 31, 2000 $549,000 FIXED CHARGES - FOR ANY PERIOD, THE FOLLOWING, EACH CALCULATED (WITHOUT DUPLICATION) FOR SUCH PERIOD: (A) CASH INTEREST EXPENSES, PLUS (B) INCOME TAXES OF HOLDINGS AND ITS SUBSIDIARIES, PLUS (C) SCHEDULED PAYMENTS OF PRINCIPAL WITH RESPECT TO ALL INDEBTEDNESS OF HOLDINGS AND ITS SUBSIDIARIES, PLUS (D) CAPITAL EXPENDITURES MADE DURING THE APPLICABLE PERIOD EXCLUDING (I) CAPITAL EXPENDITURES FINANCED BY ACQUISITION LOANS, EXCEPT CAPITAL EXPENDITURES MADE IN COMPLIANCE WITH THE PROVISO CONTAINED IN SECTION 8.2.9, (II) CAPITAL EXPENDITURES MADE IN CONNECTION WITH THE PURCHASE OF REAL PROPERTY FROM CRESCENT REAL ESTATE FUNDING VII, L.P. OF UP TO $7,700,000.00, AND (III) (A) FOR THE FISCAL QUARTER ENDING JUNE 30, 2000, CAPITAL EXPENDITURES OF $8,000, (B) FOR THE FISCAL QUARTER ENDING SEPTEMBER 30, 2000, CAPITAL EXPENDITURES OF $36,000, (C) FOR THE FISCAL QUARTER ENDING DECEMBER 31, 2000, CAPITAL EXPENDITURES OF $204,000 AND (D) FOR THE FISCAL QUARTER ENDING MARCH 31, 2001, CAPITAL EXPENDITURES OF $129,000, PLUS (E) PAYMENTS MADE DURING THE APPLICABLE PERIOD UNDER CAPITAL LEASES PERMITTED BY THE TERMS HEREOF, PLUS (F) PAYMENTS MADE DURING THE APPLICABLE PERIOD UNDER PERMITTED PURCHASE MONEY INDEBTEDNESS TOTAL INDEBTEDNESS - AS OF ANY DATE OF DETERMINATION, THE SUM OF (I) THE AGGREGATE OUTSTANDING PRINCIPAL BALANCE OF ALL MONEY BORROWED OF HOLDINGS AND ITS SUBSIDIARIES ON A CONSOLIDATED BASIS MINUS (II) THE AGGREGATE AMOUNT OF HOLDINGS' AND ITS SUBSIDIARIES' UNRESTRICTED CASH BALANCES AS OF SUCH DATE. 1.2 AMENDMENT TO FIXED CHARGE COVERAGE RATIO. Section 8.3.1 of the Loan Agreement shall be amended to read in its entirety as follows: 2 3 8.3.1 FIXED CHARGE COVERAGE RATIO. MAINTAIN, AS OF THE END OF EACH FISCAL QUARTER SET FORTH BELOW, FOR THE CUMULATIVE PERIOD ENDING ON SUCH DATE, A FIXED CHARGE RATIO OF NOT LESS THAN THE RATIO SET FORTH BELOW FOR EACH PERIOD INDICATED BELOW: PERIOD AMOUNT ------ ------ (I) TWELVE CALENDAR MONTH (I) 1.05 TO 1.0 PERIOD ENDING ON MARCH 31, 2001 (II) TWELVE CALENDAR MONTH (II) 1.05 TO 1.0 PERIOD ENDING ON JUNE 30, 2001 (III) TWELVE CALENDAR MONTH (III) 1.05 TO 1.0 PERIOD ENDING ON SEPTEMBER 30, 2001 (IV) TWELVE CALENDAR MONTH (IV) 1.10 TO 1.0 PERIOD ENDING ON THE LAST DAY OF EACH THEREAFTER OCCURRING FISCAL QUARTER; 1.3 AMENDMENT TO INTEREST COVERAGE RATIO. Section 8.3.2 of the Loan Agreement shall be amended to read in its entirety as follows: 8.3.2 INTEREST COVERAGE RATIO. ACHIEVE, AT THE END OF EACH FISCAL QUARTER, FOR THE TWELVE CALENDAR MONTH PERIOD THEN ENDING, AN INTEREST COVERAGE RATIO OF NOT LESS THAN 2.50 TO 1.0. 1.4 AMENDMENT TO TOTAL INDEBTEDNESS TO EBITDA RATIO. Section 8.3.3 of the Loan Agreement shall be amended to read in its entirety as follows: 8.3.3 TOTAL INDEBTEDNESS TO EBITDA. AS TO THE LAST DAY OF EACH FISCAL QUARTER SET FORTH BELOW (THE "CALCULATION DATE"), A RATIO OF (I) HOLDINGS' TOTAL INDEBTEDNESS ON SUCH CALCULATION DATE, TO (II) HOLDINGS' EBITDA FOR THE TWELVE CALENDAR MONTH PERIOD ENDING ON SUCH CALCULATION DATE, OF NOT GREATER THAN THE RATIO SET FORTH BELOW ON THE CALCULATION DATE CORRESPONDING THERETO: CALCULATION DATE RATIO ---------------- ----- (I) MARCH 31, 2001 (I) 3.65 TO 1.0 (II) JUNE 30, 2001 (II) 3.70 TO 1.0 (III) SEPTEMBER 30, 2001 (III) 3.65 TO 1.0 (IV) DECEMBER 31, 2001 (IV) 3.50 TO 1.00 (V) MARCH 31, 2002 AND ON (V) 3.25 TO 1.00 THE LAST DAY OF EACH THEREAFTER OCCURRING FISCAL QUARTER; 3 4 PROVIDED, HOWEVER, THAT, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE FOLLOWING AMOUNTS SHALL BE ADDED TO HOLDINGS' EBITDA FOR EACH OF THE FOLLOWING FISCAL QUARTERS FOR PURPOSES OF THIS SECTION 8.3.3. FISCAL QUARTER ENDING: AMOUNT: ---------------------- ------- MARCH 31, 2000 $664,000 JUNE 30, 2000 $537,000 SEPTEMBER 30, 2000 $222,000 SECTION 2. WAIVER. Effective as of the Seventh Amendment Effective Date, Agent and Lenders hereby waive the Existing Events of Default. Borrowers acknowledge and agree that the foregoing waivers are limited solely to the matters expressly set forth herein and for the period of time set forth herein. Nothing contained in the waivers set forth herein shall obligate Agent and Lenders to grant any additional or future waiver pursuant to any of SECTIONS 8.3.1 AND 8.3.3 of the Loan Agreement or any other provision of the Loan Agreement or any other Loan Document. SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF AMENDMENTS. The amendments to the Loan Agreement contained in SECTION 1 of this Seventh Amendment shall be effective only upon the satisfaction of each of the conditions set forth in this SECTION 3. If each condition set forth in this SECTION 3 has not been satisfied by April 20, 2001, this Seventh Amendment and all obligations of Lenders contained herein shall, at the option of Lenders, terminate. 3.1 DOCUMENTATION. Agent and Lenders shall have received, in form and substance acceptable to Agent and Lenders and their counsel a duly executed copy of this Seventh Amendment, and any other documents, instruments and certificates as Agent and Lenders and their counsel shall require in connection therewith prior to the date hereof, all in form and substance satisfactory to Agent and Lenders and their counsel. 3.2 CORPORATE EXISTENCE AND AUTHORITY. Agent and Lenders shall have received such resolutions, certificates and other documents as Agent and Lenders shall request relative to the authorization, execution and delivery by each Loan Party of this Seventh Amendment. 3.3 NO DEFAULT. No Default or Event of Default shall exist. 4 5 3.4 NO LITIGATION. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any court, governmental agency or legislative body to enjoin, restrain or prohibit, or to obtain damages in respect of, or which is related to or arises out of this Seventh Amendment, the Loan Agreement or the consummation of the transactions contemplated hereby. 3.5 2007 SUBORDINATED DEBT DOCUMENTS. ING and SunTrust shall have waived any existing defaults or events of default with respect to the 2007 Subordinated Debt Documents and Holdings, Borrower, ING and Sun Trust shall have executed and delivered an amendment to the 2007 Purchase Agreement, in form and substance satisfactory to Agent and its counsel and including certain adjustments to the financial covenants and the definitions used therein. 3.6 FEE. Borrowers shall have paid to Agent an amendment fee of $20,000. SECTION 4. REPRESENTATIONS AND WARRANTIES OF BORROWERS. To induce Agent and Lenders to enter into this Seventh Amendment, each Borrower hereby represents and warrants to Agent and Lenders as follows: 4.1 REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. Each representation and warranty of any Loan Party contained in the Loan Agreement and the other Loan Documents, as amended hereby, is true and correct on the date hereof and will be true and correct after giving effect to the amendments set forth in SECTION 1 hereof. 4.2 NO OUTSTANDING JUNIOR SUBORDINATED DEBT OR PREFERRED STOCK. As of the date hereof, there is no outstanding Indebtedness with respect to the Junior Subordinated Debt Documents and no Preferred Stock is outstanding. 4.3 CORPORATE AUTHORITY; NO CONFLICTS. The execution, delivery and performance by each Borrower of this Seventh Amendment and all documents, instruments and agreements contemplated herein are within each Borrower's respective corporate powers, have been duly authorized by necessary action, require no action by or in respect of, or filing with, any court or agency of government and do not violate or constitute a default under any provision of applicable Law or any material agreement binding upon any Loan Party or result in the creation or imposition of any Lien upon any of the assets of any Loan Party except as permitted in the Loan Agreement, as amended hereby. 4.4 ENFORCEABILITY. This Seventh Amendment constitutes the valid and binding obligation of each of the Borrowers enforceable in accordance with its terms, except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditor's rights generally, and (ii) the availability of equitable remedies may be limited by equitable principles of general application. 4.5 NO DEFENSES. No Loan Party has any defenses to payment, counterclaims or rights of set off with respect to the Obligations. 5 6 SECTION 5. MISCELLANEOUS. 5.1 REAFFIRMATION OF LOAN DOCUMENTS; EXTENSION OF LIENS. Any and all of the terms and provisions of the Loan Agreement and the Loan Documents shall, except as amended and modified hereby, remain in full force and effect. Borrowers hereby extend the Liens securing the Obligations until the Obligations have been paid in full, and agree that the amendments and modifications herein contained shall in no manner affect or impair the Obligations or the Liens securing the payment and performance thereof. 5.2 PARTIES IN INTEREST. All of the terms and provisions of this Seventh Amendment shall bind and inure to the benefit of the parties hereto and their respective successors and assigns. 5.3 LEGAL EXPENSES. The Borrowers hereby agree to pay promptly following receipt of an invoice detailing all reasonable fees and expenses of counsel to Agent and Lenders incurred by Agent or any Lender, in connection with the preparation, negotiation and execution of this Seventh Amendment and all related documents. 5.4 COUNTERPARTS. This Seventh Amendment may be executed in counterparts, and all parties need not execute the same counterpart. However, no party shall be bound by this Seventh Amendment until all parties have executed a counterpart. Facsimiles shall be effective as originals. 5.5 COMPLETE AGREEMENT. THIS SEVENTH AMENDMENT, THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 5.6 HEADINGS. The headings, captions and arrangements used in this Seventh Amendment are, unless specified otherwise, for convenience only and shall not be deemed to limit, amplify or modify the terms of this Seventh Amendment, nor affect the meaning thereof. (SIGNATURE PAGE FOLLOWS) 6 7 IN WITNESS WHEREOF, the parties hereto have caused this Seventh Amendment to be duly executed by their respective authorized officers on the date and year first above written. BORROWERS: RAMSAY YOUTH SERVICES, INC. By: -------------------------------------------------- Marcio Cabrera Executive Vice President BETHANY PSYCHIATRIC HOSPITAL, INC. BOUNTIFUL PSYCHIATRIC HOSPITAL, INC. EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION GREAT PLAINS HOSPITAL, INC. GULF COAST TREATMENT CENTER, INC. HAVENWYCK HOSPITAL, INC. H. C. CORPORATION HSA HILL CREST CORPORATION HSA OF OKLAHOMA, INC. MICHIGAN PSYCHIATRIC SERVICES, INC. RAMSAY EDUCATIONAL SERVICES, INC. RAMSAY LOUISIANA, INC. RAMSAY MANAGED CARE, INC. RAMSAY YOUTH SERVICES OF ALABAMA, INC. RAMSAY YOUTH SERVICES OF FLORIDA, INC. RAMSAY YOUTH SERVICES OF SOUTH CAROLINA, INC. RHCI SAN ANTONIO, INC. TRANSITIONAL CARE VENTURES, INC. TRANSITIONAL CARE VENTURES (TEXAS), INC. By: -------------------------------------------------- Marcio Cabrera Vice President H. C. PARTNERSHIP By: H.C. CORPORATION, General Partner By: HSA HILL CREST CORPORATION, General Partner By: -------------------------------------------------- Marcio Cabrera Vice President 7 8 AGENT AND LENDERS: FLEET CAPITAL CORPORATION ("Agent" and a "Lender") By: -------------------------------------------------- Name: Dennis M. Hansen Title: Senior Vice President SUNTRUST BANK (a "Lender") By: -------------------------------------------------- Name: William H. Crawford Title: Assistant Vice President 8 9 CONSENT AND REAFFIRMATION The undersigned (each a "GUARANTOR") hereby (i) acknowledges receipt of a copy of the foregoing Seventh Amendment to Loan and Security Agreement and Waiver (the "SEVENTH AMENDMENT"); (ii) consents to Borrowers' execution and delivery thereof; (iii) agrees to be bound thereby; and (iv) affirms that nothing contained therein shall modify in any respect whatsoever its guaranty of the obligations of the Borrowers to Lenders pursuant to the terms of its Guaranty in favor of Agent and the Lenders (the "GUARANTY") and reaffirms that the Guaranty is and shall continue to remain in full force and effect. Although Guarantor has been informed of the matters set forth herein and has acknowledged and agreed to same, Guarantor understands that the Lenders have no obligation to inform Guarantor of such matters in the future or to seek Guarantor's acknowledgment or agreement to future amendments or waivers, and nothing herein shall create such duty. IN WITNESS WHEREOF, the undersigned has executed this Consent and Reaffirmation on and as of the date of the Seventh Amendment. GUARANTOR: RAMSAY HOSPITAL CORPORATION OF LOUISIANA, INC. RAMSAY YOUTH SERVICES PUERTO RICO, INC. By: -------------------------------------------------- Marcio Cabrera Vice President 9 EX-10.150 3 g69408ex10-150.txt 2ND AMENDED & RESTATED SUBORDINATED NOTE & WARRANT 1 EXHIBIT 10.150 SECOND AMENDMENT TO AMENDED AND RESTATED SUBORDINATED NOTE AND WARRANT PURCHASE AGREEMENT This SECOND AMENDMENT TO AMENDED AND RESTATED SUBORDINATED NOTE AND WARRANT PURCHASE AGREEMENT (this "Amendment") is made and entered into as of April 16, 2001, by and between RAMSAY YOUTH SERVICES, INC., a corporation organized under the laws of the State of Delaware, as issuer of the Notes and the Warrants (the "COMPANY"), each of the subsidiaries of the Company listed on the signature pages hereto, as guarantors (individually, a "GUARANTOR" and, collectively, the "GUARANTORS"), SUNTRUST BANKS, INC., ("SUNTRUST"), ING (U.S.) CAPITAL, LLC ("ING"; ING and SunTrust individually a "PURCHASER" and collectively the "PURCHASERS"). W I T N E S S E T H : ------------------- WHEREAS, Company, the Subsidiary Guarantors and the Purchasers are parties to that certain Amended and Restated Subordinated Note and Warrant Purchase Agreement, dated as of June 19, 2000, as amended by that certain First Amendment to Amended and Restated Subordinated Note and Warrant Purchase Agreement, dated as of July 31, 2000, (as amended, restated, modified or otherwise supplemented from time to time, the "Purchase Agreement"), pursuant to which the Purchasers made a $10,000,000 subordinated debt investment in the Company; WHEREAS, Company has requested that the Purchasers make certain amendments to the Purchase Agreement and the Purchasers are willing to do so on the terms and conditions set forth herein; NOW THEREFORE, in consideration of the terms and conditions contained herein, the parties hereto, intending to be legally bound, hereby agree as follows: A. DEFINITIONS. Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Purchase Agreement. B. AMENDMENT TO SECTION 1.1 OF THE PURCHASE AGREEMENT. Section 1.1 of the Purchase Agreement is amended by replacing the definition therein of "Total Debt to EBITDA Ratio" with the following new definition: "TOTAL DEBT TO EBITDA RATIO" shall mean, with respect to the Company and its Subsidiaries on a consolidated basis, as of any calculation date, the ratio of (a) Money Borrowed, less the amount of unrestricted cash balances of the Company, as of such date, to (b) EBITDA for the preceding four fiscal quarter period then ending. 2 C. AMENDMENT TO SECTION 8.12 OF THE PURCHASE AGREEMENT. Section 8.12 of the Purchase Agreement is amended by replacing such subsection in its entirety with the following new subsection 8.12: "FINANCIAL COVENANTS. At any time during the term of this Agreement, have a Total Debt to EBITDA Ratio, calculated on the last day of each fiscal quarter of the Company, commencing with the quarter ending December 31, 1999, of more than 3.80:1.0.; PROVIDED, HOWEVER, that notwithstanding anything to the contrary contained herein, the following amounts shall be added to the Company's EBITDA for each of the following fiscal quarters for purposes of this Section 8.12: FISCAL QUARTER ENDING AMOUNT --------------------- ------ December 31, 1999 $538,000 March 31, 2000 $664,000 June 30, 2000 $731,000 September 30, 2000 $455,000 December 31, 2000 $549,000" D. CONDITIONS TO EFFECTIVENESS OF AMENDMENT. This Amendment shall become effective (the "SECOND AMENDMENT EFFECTIVE DATE") when each Purchaser shall have received a duly executed counterpart of this Amendment executed by each party hereto. E. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and warrants to the Purchasers that: (a) the execution, delivery and performance of this Amendment (i) is within Company's corporate power; (ii) has been duly authorized by all necessary corporate and shareholder action; (iii) does not require the consent, approval, authorization of, or registration or filing with, any Person under any Material Contract, with any Person under the organizational documents of the Consolidated Companies, or with any governmental authority other than such consents, approvals, authorizations, registrations or filings which have been made or obtained and are in full force and effect, and (iv) will not cause a breach or default under any of any of the Consolidated Companies Material Contracts or organizational documents of any of the Consolidated Companies except as could not reasonably be expected to have a Material Adverse Effect; (b) this Amendment has been duly executed and delivered for the benefit or on behalf of Company and constitutes the legal, valid and binding obligation of Company, enforceable against it in accordance with its terms, except as the enforceability hereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors' rights and remedies in general, and by general principles of equity; and 2 3 (c) after giving effect to this Amendment, all of representations and warranties set forth in Article 6 of the Purchase Agreement are true and correct in all material respects and no Default or Event of Default has occurred and is continuing as of the date hereof. F. SURVIVAL. Except as expressly provided herein, the Purchase Agreement and the Subordination Agreement shall continue in full force and effect, and the unamended terms and conditions of the Purchase Agreement and the Subordination Agreement are expressly incorporated herein and ratified and confirmed in all respects. This Amendment is not intended to be or to create, nor shall it be construed as, a novation or an accord and satisfaction. G. EFFECT OF AMENDMENT. From and after the date hereof, references to the Purchase Agreement shall be references to the Purchase Agreement as amended hereby and references to the Subordination Agreement shall be references to the Subordination Agreement as amended hereby. H. ENTIRE UNDERSTANDING. This Amendment constitutes the entire agreement between the parties hereto with respect to the subject matter hereof. Neither this Amendment nor any provision hereof may be changed, waived, discharged, modified or terminated orally, but only by an instrument in writing signed by the parties required to be a party thereto pursuant to Section 10.4 of the Purchase Agreement. I. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF) OF THE STATE OF GEORGIA. J. COUNTERPARTS. This Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. [SIGNATURES TO FOLLOW ON NEXT PAGE] 3 4 IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed as of the date first above written. COMPANY: RAMSAY YOUTH SERVICES, INC. By: -------------------------------------------------- Marcio C. Cabrera Executive Vice President SUBSIDIARY GUARANTORS: BETHANY PSYCHIATRIC HOSPITAL, INC., an Oklahoma corporation BOUNTIFUL PSYCHIATRIC HOSPITAL, INC., a Utah corporation EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION, a North Carolina corporation GREAT PLAINS HOSPITAL, INC., a Missouri corporation GULF COAST TREATMENT CENTER, INC., a Florida corporation H.C. CORPORATION, an Alabama corporation HAVENWYCK HOSPITAL, INC., a Michigan corporation HSA HILL CREST CORPORATION, an Alabama corporation HSA OF OKLAHOMA, INC., an Oklahoma corporation MICHIGAN PSYCHIATRIC SERVICES, INC., a Michigan corporation 4 5 RAMSAY EDUCATIONAL SERVICES, INC., a Delaware corporation RAMSAY HOSPITAL CORPORATION OF LOUISIANA, INC., a Louisiana corporation RAMSAY LOUISIANA, INC., a Delaware corporation RAMSAY MANAGED CARE, INC., a Delaware corporation RAMSAY YOUTH SERVICES OF ALABAMA, INC., a Delaware corporation RAMSAY YOUTH SERVICES OF FLORIDA, INC., a Delaware corporation RAMSAY YOUTH SERVICES OF SOUTH CAROLINA, INC., a Delaware corporation RAMSAY YOUTH SERVICES PUERTO RICO, INC., a Puerto Rico corporation RHCI SAN ANTONIO, INC., a Delaware corporation TRANSITIONAL CARE VENTURES, INC., a Delaware corporation TRANSITIONAL CARE VENTURES (TEXAS), INC., a Delaware corporation By: -------------------------------------------- Marcio C. Cabrera Vice President 5 6 H.C. PARTNERSHIP By: H.C. CORPORATION, an Alabama corporation, as a general partner By: -------------------------- Marcio C. Cabrera Vice President By: HSA HILL CREST CORPORATION, an Alabama corporation, as a general partner By: -------------------------- Marcio C. Cabrera Vice President 6 7 PURCHASERS: SUNTRUST BANKS, INC. By: ----------------------------------- Robert L. Dudiak Group Vice President ING (U.S.) CAPITAL LLC By: ----------------------------------- Steven G. Fleenor Director 7 EX-11 4 g69408ex11.txt COMPUTATION OF NET INCOME (LOSS) PER SHARE 1 EXHIBIT 11 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES
QUARTER ENDED MARCH 31, ---------------------------- 2000 2000 ------------ ---------- (unaudited) (unaudited) Numerator: Numerator for basic earnings per share - income attributable to common stockholders .................................. $ 384,000 $ 160,000 Effect of dilutive securities ............................................ -- -- ------------ ---------- -- -- ------------ ---------- Numerator for diluted earnings per share - income attributable to common stockholders after assumed conversions .......................................................... $ 384,000 $ 160,000 ============ ========== Denominator: Denominator for basic earnings per share - weighted-average shares ................................................ 8,929,000 8,895,000 Effect of dilutive securities: Employee stock options and warrants .................................... -- 108,000 ------------ ---------- Dilutive potential common shares ......................................... -- 108,000 ------------ ---------- Denominator for diluted earnings per share - adjusted weighted-average shares and assumed conversions ...................... 8,929,000 9,003,000 ============ ========== Earnings per share: Basic .................................................................... $ .04 $ .02 ============ ========== Diluted .................................................................. $ .04 $ .02 ============ ==========
EX-99.18 5 g69408ex99-18.txt PRESS RELEASE DATED 3/30/01 1 EXHIBIT 99.18 FOR IMMEDIATE RELEASE RAMSAY YOUTH SERVICES, INC. ANNOUNCES FOURTH QUARTER AND YEAR END RESULTS CORAL GABLES, FLORIDA, MARCH 30, 2001 . . . RAMSAY YOUTH SERVICES, INC. (NASDAQ:RYOU) today announced results for the fourth quarter and year ended December 31, 2000. Total revenues for the quarter increased 43% to $31,781,000 from $22,244,000 for the same period in the prior year. Net income for the quarter totaled $2,447,000 or $0.27 per share. The quarter results include the positive impact of the reversal of a $2,500,000 reserve for a legal case against the Company which was dismissed in court. In addition, the quarter results also include the negative impact of a $249,000 loss on the sale of assets. These two non-recurring items increased results for the quarter by a net amount of $2,251,000 or $0.25 per share. For the year, the Company reported total revenues of $108,360,000 up 33% from $81,474,000 for fiscal 1999. Net income for the twelve months ended December 31, 2000 was $2,852,000 or $0.32 per share. The year end results were positively impacted by the reversal of the aforementioned $2,500,000 legal reserve, and by the negative impact of a $705,000 loss on the sale of assets. These two non-recurring items increased results for the year by a net amount of $1,795,000 or $0.20 per share. Commenting on the results, Luis E. Lamela, President and CEO of Ramsay Youth Services, Inc. said, "Our fourth quarter and year end results reflect our continued success in growing the Company, specifically in the area of treatment programs and services for youth." Ramsay Youth Services, Inc. is a treatment company that provides behavioral healthcare, juvenile justice, education and community-based programs for at-risk, troubled and special needs youth. The Company has operations in nine states and the Commonwealth of Puerto Rico. Except for historical information contained herein, the matters set forth in this news release are forward-looking statements as defined under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve known and unknown risks and uncertainties including the uncertainties regarding the resolution of issues in Puerto Rico. Actual operations and results may differ materially from those expected in the forward looking statements made by the Company. Please refer to Ramsay's filings with the Securities and Exchange Commission for additional information. Tables Follow ### Contact: Isa Diaz Vice President Corporate Relations (305) 569-4626 2 RAMSAY YOUTH SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS
QUARTER ENDED DECEMBER 31, --------------------------------------------------------- 2000 1999 -------------------------- --------------------------- Revenues $31,781,000 100% $ 22,244,000 100.0% Operating expenses: Salaries, wages and benefits 20,008,000 63.0% 13,809,000 62.1% Other operating expenses 6,349,000 20.0% 6,325,000 28.4% Provision for doubtful accounts 1,087,000 3.4% 504,000 2.3% Depreciation and amortization 648,000 2.0% 610,000 2.7% -------------------------- --------------------------- Total operating expenses 28,092,000 88.4% 21,248,000 95.5% -------------------------- --------------------------- Income from operations 3,689,000 11.6% 996,000 4.5% Non-operating income (expenses): Investment income and other 64,000 0.2% Loss on sale of assets (249,000) (0.8%) Interest and other financing charges (955,000) (3.0%) (371,000) (1.7%) -------------------------- --------------------------- Total non-operating expenses, net (1,140,000) (3.6%) (371,000) (1.7%) Income before income taxes 2,549,000 8.0% 625,000 2.8% Provision (benefit) for income taxes 102,000 0.3% (34,000) (0.2%) -------------------------- --------------------------- Net income $ 2,447,000 7.7% $ 659,000 3.0% ========================== =========================== Income per common share: Basic $ 0.27 $ 0.07 ================ ================= Diluted $ 0.27 $ 0.07 ================ ================= Weighted average number of common shares outstanding: Basic 8,927,000 8,892,000 ================ ================= Diluted 8,927,000 8,892,000 ================ =================
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