U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002
|_| TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM ___________ TO ___________
Commission file number 0- 22916
PHC, INC.
(Exact name of small business issuer as specified in its charter)
Massachusetts 04-2601571
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Lake Street, Suite 102, Peabody MA 01960
(Address of principal executive offices) (Zip Code)
978-536-2777
(Issuer's telephone number)
________________________________________________________________________________
(Former Name, former address and former fiscal year, if changed since last
report) Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No____
Applicable only to corporate issuers
Number of shares outstanding of each class of common equity, as of October 31,
2002
Class A Common Stock 13,349,544
Class B Common Stock 726,991
Transitional Small Business Disclosure Format
(Check one):
Yes______ No X
-- 1 --
PHC, Inc.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets - September 30, 2002 (unaudited)
and June 30, 2002.
Condensed Consolidated Statements of Operations (unaudited) - Three
months ended September 30, 2002 and September 30, 2001.
Condensed Consolidated Statements of Cash Flows (unaudited) - Three
months ended September 30, 2002 and September 30, 2001.
Notes to Condensed Consolidated Financial Statements - September 30,
2002.
Item 2. Management's Discussion and Analysis or Plan of Operation
PART II. OTHER INFORMATION
Item 6. Exhibits
Signatures
-- 2 --
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements
PHC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, June 30,
ASSETS 2002 2002
___________ ___________
Current assets: (unaudited)
Cash and cash equivalents $ 31,201 $ 204,564
Accounts receivable, net of allowance
for doubtful accounts of $2,576,762
at September 30, 2002, $2,715,760
at June 30, 2002 4,874,018 5,078,419
Prepaid expenses 222,997 66,652
Other receivables and advances 196,080 137,032
Deferred income tax asset 808,607 766,793
___________ ___________
Total current assets 6,132,903 6,253,460
Accounts receivable, non-current 725,000 690,000
Other receivable 97,375 92,068
Property and equipment, net 1,315,257 1,259,648
Deferred financing costs, net of amortization
of $124,109 at September 30, 2002 and
$122,109 at June 30, 2002 10,000 12,000
Goodwill, net of accumulated amortization of
$270,105 at September 30, 2002 and June 30,
2002 969,099 969,099
Other assets 194,910 197,340
___________ ___________
Total assets $9,444,544 $9,473,615
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 983,152 $1,283,389
Notes payable--related parties 150,000 200,000
Current maturities of long-term debt 769,718 765,415
Revolving credit note 1,350,779 1,468,644
Deferred revenue 160,963 129,258
Current portion of obligations under capital
leases 16,690 11,020
Accrued payroll, payroll taxes and benefits 387,448 452,177
Accrued expenses and other liabilities 1,324,436 1,597,642
Convertible debentures 500,000 500,000
___________ ___________
Total current liabilities 5,643,186 6,407,545
___________ ___________
Long-term debt 2,233,537 2,428,945
Obligations under capital leases 45,137 21,140
___________ ___________
Total noncurrent liabilities 2,278,674 2,450,085
___________ ___________
Total liabilities 7,921,860 8,857,630
___________ ___________
Stockholders' equity
Class A common stock, $.01 par value;
20,000,000 shares authorized, 13,363,460
and 12,919,042 shares issued September 30,
2002 and June 30, 2002, respectively 133,635 129,190
Class B common stock, $.01 par value;
2,000,000 shares authorized, 726,991
issued and outstanding September 30, 2002
and June 30, 2002, convertible into one
share of Class A common stock 7,270 7,270
Additional paid-in capital 19,118,347 18,769,863
Treasury stock, 38,126 shares at September 30,
2002 and June 30, 2002, at cost (30,988) (30,988)
Notes receivable, common stock (80,000) (80,000)
Accumulated deficit (17,625,580) (18,179,350)
___________ ___________
Total stockholders' equity 1,522,684 615,985
___________ ___________
Total liabilities and stockholders' equity $9,444,544 $9,473,615
============= ============
See Notes to Condensed Consolidated Financial Statements.
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PHC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
September 30,
2002 2001
___________ ___________
Revenues:
Patient care, net $ 5,311,625 $5,319,144
Pharmaceutical studies 361,889 79,817
Website services -- 2,301
Contract support services 297,873 212,976
___________ ___________
Total revenue 5,971,387 5,614,238
___________ ___________
Operating expenses:
Patient care expenses 2,475,661 2,672,391
Cost of contract support services 280,962 168,972
Provision for doubtful accounts 297,775 116,439
Website expenses 56,041 80,947
Administrative and other operating expenses 2,190,972 1,927,347
___________ ___________
Total operating expenses 5,301,411 4,966,096
___________ ___________
Income from operations 669,976 648,142
Other income (expense):
Interest income 3,814 3,342
Other income, net 26,182 19,327
Interest expense (146,202) (217,830)
___________ ___________
Total other expense, net (116,206) (195,161)
____________ ___________
Income before provision for taxes 553,770 452,981
Provision for income taxes -- --
___________ ___________
Net income $ 553,770 $ 452,981
Dividends -- (30,388)
___________ ___________
Income applicable to common stockholders $ 553,770 $ 422,593
=========== ============
Basic income per common share $ .04 $ .04
Basic weighted average number of shares outstanding 13,727,657 9,399,161
Fully diluted income per common share $ .04 $ .03
Fully diluted weighted average number of shares
outstanding 14,352,963 14,530,625
See Notes to Condensed Consolidated Financial Statements.
-- 4 --
PHC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Three Months Ended
September 30,
2002 2001
___________ ___________
Cash flows from operating activities:
Net income $ 553,770 $ 452,981
Adjustments to reconcile net income to
net cash provided by (used in) operating
activities:
Depreciation and amortization 39,771 56,214
Amortization of financing costs 2,000 2,000
Compensatory stock options (12,825) --
Stock options and warrants issued for
obligations 655 2,110
Changes in:
Accounts receivable 105,047 5,995
Prepaid expenses (156,345) (144,460)
Other assets (41,399) (22,579)
Accounts payable (300,237) (14,616)
Accrued expenses and other liabilities 8,455 19,208
Net liabilities of discontinued operations -- (2,967)
___________ ___________
Net cash provided by operating activities 198,892 353,886
___________ ___________
Cash flows from investing activities:
Acquisition of property and equipment (93,365) (50,048)
___________ ___________
Net cash used in investing activities (93,365) (50,048)
___________ ___________
Cash flows from financing activities:
Revolving debt, net (117,865) (30,377)
Principal payments on long-term debt (211,438) (159,310)
Costs related to issuance of capital stock (7,212) (13,380)
Purchase of treasury stock -- (6,094)
Issuance of common stock 57,625 300
___________ ___________
Net cash used in financing activities (278,890) (208,861)
___________ ___________
NET INCREASE (DECREASE) IN CASH (173,363) 94,977
Beginning cash balance 204,564 43,732
___________ ___________
ENDING CASH BALANCE $ 31,201 $ 138,709
=========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 130,669 $ 211,679
Income taxes 48,910 500
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Issuance of common stock for options $ 302,516 $ --
Accrued dividends on series C preferred
stock -- 30,388
See Notes to Condensed Consolidated Financial Statements.
-- 5 --
PHC, INC. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
September 30, 2002
Note A - The Company
PHC, Inc. and its wholly owned subsidiaries (the "company") is a national health
care company specializing in behavioral health services including the treatment
of substance abuse, which includes alcohol and drug dependency and related
disorders and the provision of psychiatric services. The company also provides
management, administrative and online behavioral health services. The company
primarily operates under three business segments:
(1) Behavioral health treatment services, including two substance abuse
treatment facilities: Highland Ridge Hospital, located in Salt Lake City, Utah,
which also treats psychiatric patients; and Mount Regis Center, located in
Salem, Virginia, and eight psychiatric treatment locations which include Harbor
Oaks Hospital, a 64-bed psychiatric hospital located in New Baltimore, Michigan
and seven outpatient behavioral health locations (two in Las Vegas, Nevada
operating as Harmony Healthcare, one in Shawnee Mission, Kansas operating as
Total Concept and four locations operating as Pioneer Counseling Center in the
Detroit, Michigan metropolitan area);
(2) Behavioral health administrative services, including delivery of
management, administrative and help line services. PHC, Inc. provides management
and administrative services for its behavioral health treatment subsidiaries.
Pioneer Development and Support Services ("PDSS") provides help line services
primarily through contracts with major railroads. Pioneer Pharmaceutical
Research conducts studies of the effects of psychiatric pharmaceuticals on a
controlled population through contracts with major manufacturers of these
pharmaceuticals; and
(3) Behavioral health online services, are provided through Wellplace, the
company's internet operations, which provides Internet support services for all
other subsidiaries of the company and provides behavioral health education,
training and products for the behavioral health professional, through its
website wellplace.com.
Note B - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-QSB and Item 310 of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three months ended September 30,
2002 are not necessarily indicative of the results that may be expected for the
year ending June 30, 2003. The accompanying financial statements should be read
in conjunction with the June 30, 2002 consolidated financial statements and
footnotes thereto included in the company's 10-KSB filed on September 19, 2002.
-- 6 --
Note C - Business Segment Information
The company's behavioral health treatment services have similar economic
characteristics, services, patients and clients. Accordingly, all behavioral
health treatment services are reported on an aggregate basis under one segment.
The company's segments are more fully described in Note A above. Residual income
and expenses from closed facilities are included in the administrative services
segment. The following summarizes the company's segment data:
BEHAVIORAL HEALTH
TREATMENT ADMINISTRATIVE ONLINE
SERVICES SERVICES SERVICES ELIMINATIONS TOTAL
______________________________________________________________________
For the three months ended
September 30, 2002
Revenues - external customers 5,311,625 659,762 -- -- 5,971,387
Revenues - intersegment 153,600 656,556 75,000 (885,156) --
Net income (loss) 909,039 (299,228) (56,041) -- 553,770
Identifiable assets 8,090,946 1,258,899 94,699 -- 9,444,544
______________________________________________________________________
For the three months ended
September 30, 2001
Revenues - external customers $ 5,319,144 $ 292,793 $ 2,301 $ -- $ 5,614,238
Revenues - intersegment -- 474,000 75,000 (549,000) --
Net income (loss) 932,089 (400,462) (78,646) -- 452,981
Identifiable assets 8,653,165 1,202,862 115,280 -- 9,971,307
______________________________________________________________________
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Note D - New Accounting Standards
In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived assets," which addresses financial accounting and
reporting for the impairment or disposal of long-lived assets. This statement
supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets To Be Disposed Of," and APB Opinion No. 30, "Reporting the
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business." SFAS No. 144 becomes effective for the fiscal years beginning after
December 15, 2001. The Company adopted SFAS No. 144 in the quarter ended
September 30, 2002 with no impact to its financial position or results of
operations.
In July 2002, the FASB issued SFAS No. 146, "Accounting for Cost Associated with
Exit or Disposal Activities". SFAS No. 146 requires companies to recognize cost
associated with exit or disposal activities when they are incurred rather than
at the date of a commitment to an exit or disposal plan. SFAS 146 will be
applied prospectively to any exit or disposal activities initiated after
December 31, 2002. The company expects there will be no effect on its financial
results relating to the adoption of SFAS No. 146.
-- 8 --
Item 2. Management's Discussion and Analysis or Plan of Operation
Overview
The company presently provides behavioral health care services through two
substance abuse treatment centers, a psychiatric hospital and seven outpatient
psychiatric centers (collectively called "treatment facilities"). The company's
revenue for providing behavioral health services through these facilities is
derived from contracts with managed care companies, Medicare, Medicaid, state
agencies, railroads, gaming industry corporations and individual clients. The
profitability of the company is largely dependent on the level of patient census
and the payor mix at these treatment facilities. Patient census is measured by
the number of days a client remains overnight at an inpatient facility or the
number of visits or encounters with clients at out patient clinics. Payor mix is
determined by the source of payment to be received for each client being
provided billable services. The company's administrative expenses do not vary
greatly as a percentage of total revenue but the percentage tends to decrease
slightly as revenue increases. Although the company has changed the focus and
reduced expenses of its' internet operation, Behavioral Health Online, Inc., to
provide technology and internet support for the company's other operations, it
also continues to provide behavioral health information and education through
its web site at Wellplace.com. The company's most recent addition, Pioneer
Pharmaceutical Research, contracts with major manufacturers of psychiatric
pharmaceuticals to assist in the study of the effects of certain pharmaceuticals
in the treatment of specific mental illness.
The healthcare industry is subject to extensive federal, state and local
regulation governing, among other things, licensure and certification, conduct
of operations, audit and retroactive adjustment of prior government billings and
reimbursement. In addition, there are on going debates and initiatives regarding
the restructuring of the health care system in its entirety. The extent of any
regulatory changes and their impact on the company's business is unknown. The
current administration has put forth proposals to mandate equality in the
benefits available to those individuals suffering from mental illness. If passed
this legislation will improve access to the companies programs. Managed care has
had a profound impact on the company's operations, in the form of shorter
lengths of stay, extensive certification of benefits requirements and, in some
cases, reduced payment for services.
Critical Accounting Policies
The preparation of our financial statements requires management to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues, expenses and related disclosures. On an on-going basis, we evaluate
our estimates and assumptions, including but not limited to those related to
revenue recognition, accounts receivable reserves and the impairment of
long-lived assets, goodwill and other intangible assets. We base our estimates
on historical experience and various other assumptions that we believe to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.
Revenue recognition and accounts receivable:
Patient care revenues and accounts receivable are recorded at established
billing rates or at the amount realizable under agreements with third-party
payors, including Medicaid and Medicare. Revenues under third-party payor
agreements are subject to examination and contractual adjustment, and amounts
realizable may change due to periodic changes in the regulatory environment.
Provisions for estimated third party payor settlements are provided in the
period the related services are rendered. Differences between the amounts
-- 9 --
provided and subsequent settlements are recorded in operations in the year of
settlement. The provision for contractual allowances is deducted directly from
revenue and the net revenue amount is recorded as accounts receivable. The
allowance for doubtful accounts does not include the contractual allowances.
Allowance for doubtful accounts:
Reserves for bad debt are maintained at a percentage of outstanding
accounts receivable based on the company's historic collection results, the age
of the receivable and other relevant information.
Property and equipment:
Property and equipment are stated at cost. Depreciation is provided over
the estimated useful lives of the assets using accelerated and straight-line
methods.
Goodwill:
The excess of the purchase price over the fair market value of net assets
of an acquisition is recorded as goodwill. The company's net goodwill relates to
the treatment services segment of the company and is evaluated at least annually
for impairment.
Results of Operations
Total net revenue from operations increased 6.4% to $5,971,387 for the
three months ended September 30, 2002 from $5,614,238 for the three months ended
September 30, 2001 primarily due to increases in pharmaceutical study revenue
and contract support services revenue as detailed below.
Net patient care revenue remained relatively stable at $5,311,625 for the
three months ended September 30, 2002 as compared to $5,319,144 for the three
months ended September 30, 2001. This stability of core business revenues
coupled with reductions in expenses resulted in increased net income. The
company anticipates increases in top line revenues as marketing efforts produce
increased census at all three inpatient facilities.
Income before interest, taxes, depreciation, amortization and dividends
was $739,743 for the three months ended September 30, 2002 compared to $720,025
for the three months ended September 30, 2001.
Two of the key indicators of profitability of inpatient facilities are
patient days, or census, and payor mix. Patient days is the product of the
number of patients times length of stay. Increases in the number of patient days
results in higher census, which coupled with a more favorable payor mix (more
patients with higher paying insurance contracts or paying privately) usually
results in higher profitability. Therefore, patient census and payor mix are
monitored very closely.
Contract support services revenue provided by PDSS increased 39.9% to
$297,873 for the three months ended September 30, 2002 from $212,976 for the
three months ended September 30, 2001. The cost of providing these services
increased 66.3% to $280,962 for the three months ended September 30, 2002 from
$168,972 for the three months ended September 30, 2001. This is due to start-up
costs related to the new smoking cessation contract for the State of Nebraska.
Revenue from pharmaceutical studies increased 353.4% to $361,889 for the
three months ended September 30, 2002 from $79,817 for the three months ended
September 30, 2001. This increase is due to the start up of new studies and is
expected to fluctuate from period to period based on the number of studies
currently in progress and the number of participants in each study.
-- 10 --
Administrative expenses increased 13.7% to $2,190,972 for the three months
ended September 30, 2002 from $1,927,347 for the three months ended September
30, 2001. This increase is primarily due to the increase in consultant fees,
marketing and office expenses indirectly related to the increases in census.
Rent expense increased 13.9% to $219,488 for the three months ended September
30, 2002 from $192,725 for the three months ended September 30, 2001. This
increase is due to the addition of space for the pharmaceutical research company
to provide more and better-allocated space for patient visits. The company also
experienced a 14.9% increase in cost of insurance and other employee benefits to
$99,125 for the three months ended September 30, 2002 from $86,254 for the three
months ended September 30, 2001. In addition the company experienced a 177.8%
increase in fees and licenses to $25,604 for the three months ended September
30, 2002 from $9,217 for the three months ended September 30, 2001 primarily
attributable to the cost of the routine survey by the Joint Commission on the
Accreditation of Healthcare Organizations (JCAHO) at our Utah facility. As a
result of this survey, the facility earned re-accreditation for an additional
three years.
Patient care expenses decreased by 7.4% to $2,475,661 for the three months
ended September 30, 2002 from $2,672,391 for the three months ended September
30, 2001. This decrease in expenses is due to the more efficient use of salaried
staff time for patient services, which resulted in a 17% decrease in the cost of
outside consultants to provide these direct patient services. The company also
cut cost by 42% in hospital printing and hospital supplies by eliminating
unnecessary usage. The company continues to look for new ways to cut costs
through operating efficiencies without sacrificing patient care.
Bad debt expense increased 155.7% to $297,775 for the three months ended
September 30, 2002 from $116,439 for the three months ended September 30, 2001.
This is a result of the company's policy to maintain a higher reserve against
certain older receivables.
Interest expense decreased 32.9% to $146,202 for the three months ended
September 30, 2002 from $217,830 for the three months ended September 30, 2001.
This decrease in interest is due to the decrease in interest rates on the
company's long term debt and a decrease of approximately $211,000 in long-term
debt for the period ended September 30, 2002 as compared to the period ended
September 30, 2001.
The company has no provision for income taxes due to the utilization of net
operating loss carry forwards.
The company has no preferred stock outstanding as of September 30, 2002 and
no stock dividends were paid during the quarter.
The environment the company operates in today makes collection of
receivables, particularly older receivables, more difficult than in previous
years. Accordingly, the company has increased staff, standardized some
procedures for collecting receivables and instituted a more aggressive
collection policy, which has resulted in an overall decrease in its accounts
receivable. Although the company's receivables have decreased, the company
continues to reserve for bad debts based on managed care denials and past
difficulty in collections. We continue to view receivables most conservatively
by maintaining the ratio of reserves for bad debt to receivables at
approximately 31% on an accounts receivable balance, which decreased 3.6% to
$8,175,780 at September 30, 2002 from $8,484,179 at June 30, 2002. The growth of
managed care has negatively impacted reimbursement for behavioral health
services with a higher rate of denials requiring higher reserves. The $725,000
shown as non-current patient accounts receivable is presented at net realizable
value. These amounts are due from individuals in payment for treatment on which
extended payment plans have been arranged and are being met.
-- 11 --
Liquidity and Capital Resources
The company`s net cash provided by operating activities was $198,892 for
the quarter ended September 30, 2002 compared to $351,886 for the quarter ended
September 30, 2001. Cash flow from operations in the quarter ended September 30,
2002 consists of net income of $553,770 plus depreciation and amortization of
$37,756, decrease in accounts receivable of $105,047 and non-cash equity based
charges of $655 less cash used for net changes in other operating assets and
liabilities of $500,336.
Cash used in investing activities in the quarter ended September 30, 2002
consisted of $93,365 in capital expenditures compared to $50,048 in capital
expenditures in the quarter ended September 30, 2001.
Cash used in financing activities in the quarter ended September 30, 2002
primarily consisted of $329,303 in debt repayments compared to $189,687 in debt
repayments for the quarter ended September 30, 2001.
A significant factor in the liquidity and cash flow of the company is the
timely collection of its accounts receivable. Current accounts receivable from
patient care, net of allowance for doubtful accounts, decreased approximately
2.9% to $5,599,018 on September 30, 2002 from $5,768,419 on June 30, 2002. This
decrease is a result of better accounts receivable management due to increased
staff, standardization of some procedures for collecting receivables and a more
aggressive collection policy. The increased staff has allowed the company to
concentrate on current accounts receivable and resolve any problem issues before
they become uncollectable. The company's collection policy calls for earlier
contact with insurance carriers with regard to payment, use of fax and
registered mail to follow-up or resubmit claims and earlier employment of
collection agencies to assist in the collection process. Our collectors will
also seek assistance through every legal means, including the State Insurance
Commissioner's office, when appropriate, to collect claims. At the same time,
the company continues to closely monitor reserves for bad debt based on
potential insurance denials and past difficulty in collections.
The company has operated ongoing operations profitably for seven
consecutive quarters. The current positive business environment towards
behavioral health treatment and the new business opportunities give us
confidence to foresee continued improved results.
New accounting standards
In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived assets," which addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
This statement supersedes SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets To Be Disposed Of," and APB Opinion
No. 30, "Reporting the Results of Operations-Reporting the Effects of Disposal
of a Segment of a Business." SFAS No. 144 becomes effective for the fiscal years
beginning after December 15, 2001. The Company adopted SFAS No. 144 in the
quarter ended September 30, 2002 with no impact in its financial position or
results of operations.
In July 2002, the FASB issued SFAS No. 146, "Accounting for Cost Associated
with Exit or Disposal Activities". SFAS No. 146 requires companies to recognize
cost associated with exit or disposal activities when they are incurred rather
than at the date of a commitment to an exit or disposal plan. SFAS 146 will be
applied prospectively to any exit or disposal activities initiated after
December 31, 2002. The company expects there will be no effect on its financial
results relating to the adoption of SFAS No. 146.
-- 12 --
PART II OTHER INFORMATION
Item 6. Exhibits
Exhibit List
Exhibit No. Description
99.1 Certification of the Chief Executive Officer and Chief Financial
Officer Pursuant to 18 U.S.C. 1350, as adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
99.2 Certification of Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
99.3 Certification of the Chief Financial Officer Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
-- 13 --
Signatures
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
PHC, Inc.
Registrant
Date: November 5, 2002 /s/ Bruce A. Shear
Bruce A. Shear
President
Chief Executive Officer
Date: November 5, 2002 /s/ Paula C. Wurts
Paula C. Wurts
Controller
Treasurer
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