FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________________ to _______________________
Commission file number 1-11993
MIM CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 05-0489664
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Blue Hill Plaza, Pearl River, New York 10965
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(Address of principal executive offices)
(914) 735-3555
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes |X| No |_|
APPLICABLE ONLY TO CORPORATE ISSUERS:
On May 4, 1998, there were outstanding 13,591,350 shares of the Company's
$.0001 par value per share common stock ("Common Stock").
INDEX
Page Number
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PART I FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheets at
March 31, 1998 and December 31, 1997 3
Consolidated Statements of Operations for the
three months ended March 31, 1998 and 1997 4
Consolidated Statements of Cash Flows for the
three months ended March 31, 1998 and 1997 5
Notes to the Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations 7 - 9
PART II OTHER INFORMATION
Item 2 Changes in Securities and Use of Proceeds 10
Item 5 Other Information 10 - 11
Item 6 Exhibits and Reports on Form 8-K 11
SIGNATURES 12
2
PART 1
FINANCIAL INFORMATION
Item 1. Financial Statements
MIM CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except for share amounts)
March 31, December 31,
1998 1997
---------- ------------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 5,816 $ 9,593
Investment securities 15,243 19,235
Receivables, less allowance for doubtful accounts of
$1,386, in 1998 and 1997 34,742 23,666
Prepaid expenses and other current assets 832 888
-------- --------
Total current assets 56,633 53,382
Investment securities, net of current portion 1,100 3,401
Other investments 2,300 2,300
Property and equipment, net 3,626 3,499
Due from affiliates, less allowance for doubtful accounts
of $2,360, in 1998 and 1997 -- --
Other assets, net 187 145
-------- --------
Total assets $ 63,846 $ 62,727
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of capital lease obligations $ 226 $ 222
Accounts payable 367 931
Deferred revenue -- 2,799
Claims payable 29,462 26,979
Payables to plan sponsors and others 11,949 10,839
Accrued expenses 1,589 2,279
-------- --------
Total current liabilities 43,593 44,049
Capital lease obligations, net of current portion 699 756
Commitments and contingencies
Minority interest 1,112 1,112
Stockholders' equity
Preferred stock, $.0001 par value; 5,000,000 shares authorized,
no shares issued or outstanding -- --
Common stock, $.0001 par value; 40,000,000 shares authorized,
13,421,850 and 13,335,120 shares issued and outstanding
at March 31, 1998 and December 31, 1997, respectively 1 1
Additional paid-in capital 73,593 73,585
Accumulated deficit (53,425) (55,061)
Stockholder notes receivable (1,727) (1,715)
-------- --------
Total stockholders' equity 18,442 16,810
-------- --------
Total liabilities and stockholders' equity $ 63,846 $ 62,727
======== ========
The accompanying notes are an integral part of these
consolidated financial statements.
3
MIM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per share amounts)
Three months ended
March 31,
------------------
1998 1997
------- -------
(Unaudited)
Revenue $97,963 $70,811
Cost of revenue 92,384 66,829
------- -------
Gross profit 5,579 3,982
Selling, general and administrative expenses 4,450 3,909
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Income from operations 1,129 73
Interest income, net 507 623
------- -------
Income before minority interest 1,636 696
Minority interest -- 2
------- -------
Net income $ 1,636 $ 698
======= =======
Basic earnings per share $ 0.12 $ 0.06
======= =======
Diluted earnings per share $ 0.11 $ 0.05
======= =======
Weighted average shares outstanding used in computing
basic earnings per share 13,369 12,068
======= =======
Weighted average shares outstanding used in computing
diluted earnings per share 15,132 15,121
======= =======
The accompanying notes are an integral part of these
consolidated financial statements.
4
MIM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended
March 31,
---------------------
1998 1997
--------- ---------
Cash flows from operating activities: (Unaudited)
Net income $ 1,636 $ 698
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Net loss allocated to minority interest -- (2)
Depreciation and amortization 361 239
Stock option charges 7 7
Provision for losses on receivables and loans to affiliates -- 579
Changes in assets and liabilities:
Receivables (11,076) (1,318)
Prepaid expenses and other assets 56 (7)
Accounts payable (564) (826)
Deferred revenue (2,799) --
Claims payable 2,483 3,014
Payables to plan sponsors and others 1,110 (2,180)
Accrued expenses (690) (454)
-------- --------
Net cash provided by (used in) operating activities (9,476) (250)
-------- --------
Cash flows from investing activities:
Purchase of property and equipment (487) (312)
Purchase of investment securites (4,000) (14,832)
Proceeds from maturities of investment securities 10,293 21,239
Increase in other assets (43) (11)
Stockholder loans, net (12) (35)
Loans to affiliates, net -- 359
-------- --------
Net cash provided by (used in) investing activities 5,751 6,408
-------- --------
Cash flows from financing activities:
Principal payments on capital lease obligations (53) (53)
Proceeds from exercise of stock options 1 --
-------- --------
Net cash provided by (used in) financing activities (52) (53)
-------- --------
Net increase (decrease) in cash and cash equivalents (3,777) 6,105
Cash and cash equivalents--beginning of period 9,593 1,834
-------- --------
Cash and cash equivalents--end of period $ 5,816 $ 7,939
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 19 $ 12
======== ========
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS:
Equipment acquired under capital lease obligations $ -- $ --
======== ========
Distribution to stockholder through the cancellation of
stockholder notes receivable $ -- $ --
======== ========
The accompanying notes are an integral part of these
consolidated financial statements.
5
MIM CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands, except for share and per share amounts)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated interim financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information, pursuant to the rules and regulations of the U.S.
Securities and Exchange Commission (the "Commission"). Pursuant to such rules
and regulations, certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. In the opinion of
management, all adjustments considered necessary for a fair presentation of the
financial statements, primarily consisting of normal recurring adjustments, have
been included. The results of operations and cash flows for the three months
ended March 31, 1998 are not necessarily indicative of the results of operations
or cash flows which may be reported for the remainder of 1998.
These consolidated financial statements should be read in conjunction with
the consolidated financial statements, notes and information included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1997, as amended by an amendment thereto on Form 10-K/A, filed with the
Commission (the "Form 10-K").
The accounting policies following for interim financial reporting are the
same as those disclosed in Note 2 to the consolidated financial statements
included in Form 10K.
NOTE 2 - EARNINGS PER SHARE
The following table sets forth the computation of Basic Earnings per Share
and Diluted Earnings per Share:
Three Months
Ended March 31,
(In thousands except per share share amounts) 1998 1997
--------------------------------------------------- -------- --------
Net income less preferred dividends 1,636 698
Denominator:
Average number of common shares outstanding 13,369 12,068
-------- --------
Basic Earnings per Share $ .12 $ .06
======== ========
Denominator:
Average number of common shares outstanding 13,369 12,068
Common share equivalents of outstanding stock 1,763 3,053
options and deferred contingent common stock
awards
Total shares 15,132 15,121
-------- --------
Diluted Earnings per Share $ .11 $ .05
======== ========
NOTE 3 - SUBSEQUENT EVENTS
On April 14, 1998, the Company resolved its dispute with certain
subsidiaries of Sierra Health Services, Inc., a Nevada corporation ("Sierra"), a
party to a PBM Services Agreement (the "Sierra Agreement") with the Company. As
disclosed in the Company's Form 10-K, this dispute related to the parties'
divergent interpretations of certain provisions of the Sierra Agreement, which
led to Sierra's non-payment of certain invoiced amounts. Under the terms of the
settlement, both parties dismissed their respective claims pending in the United
States District Court, District of Nevada and the American Arbitration
Association. In addition, the parties modified a number of provisions of the
Sierra Agreement, including the addition of a provision permitting any party to
terminate the Sierra Agreement at any time and for any reason upon 90 days'
prior written notice. On May 8, 1998, the Company notified Sierra of its
intention to terminate the Sierra Agreement 90 days after notice thereof in
6
accordance with the terms of the Sierra Agreement. The Company continues to
provide pharmacy benefit management services to Sierra under the Sierra
Agreement during this 90-day period.
Effective May 15, 1998, Mr. John H. Klein, currently the Company's Chief
Executive Officer, Chairman of the Board of Directors and a director, will
resign from all positions held with the Company, including Chief Executive
Officer, Chairman of the Board and director. Effective on that date, Mr. Richard
H. Friedman, currently the Company's Chief Operating Officer, Chief Financial
Officer and a director will succeed Mr. Klein as the Company's Chief Executive
Officer. Mr. Scott R. Yablon, currently a director of the Company, has joined
the Company as an employee, and effective May 15, 1998, will assume the titles
of Chief Financial Officer and Chief Operating Officer of the Company.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion and analysis should be read in conjunction with
the Consolidated Financial Statements, the related Notes to the Consolidated
Financial Statements and Management's Discussion and Analysis of Financial
Condition and Results of Operations included in the Form 10-K as well as the
unaudited consolidated interim financial statements and the related notes to the
unaudited consolidated interim financial statements included in Item 1 of this
Report.
Certain statements contained in this report are not purely historical and
are considered forward looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including statements regarding the Company's expectations, hopes, intentions or
strategies regarding the future, as well as statements which are not historical
fact. Forward looking statements may include statements relating to business
development activities, future capital expenditures, the effects of regulation
and competition on the Company's business, future operating performance of the
Company and the results and/or effect of legal proceedings or investigations
and/or the resolution or settlement thereof. Investors are cautioned that any
such forward looking statements are not guarantees of future performance and
involve risks and uncertainties, and that actual results may differ materially
from those in the forward looking statements as a result of various factors.
These factors include, among other things, risks associated with capitated
(i.e., risk-based) contracts, increased government regulation related to the
health care industry in general and more specifically, pharmacy benefit
management organizations, increased competition from the Company's competitors,
including competitors which are vertically integrated with pharmaceutical
manufacturers, and the existence of complex laws and regulations relating to the
Company's business. This Report and the Form 10-K contain information regarding
important factors which could cause such differences.
Overview
A majority of the Company's revenues to date have been derived from
operations in the State of Tennessee in conjunction with RxCare of Tennessee,
Inc. ("RxCare"), a pharmacy services administrative organization owned by the
Tennessee Pharmacists Association. The Company assisted RxCare in defining and
marketing pharmacy benefit services to private health plan sponsors on a
consulting basis in 1993, but did not commence substantial operations until
January 1994 when RxCare began servicing health plan sponsors involved in the
newly instituted TennCare(R) state health program. At March 31, 1998, the
Company provided pharmacy benefit management services to 46 health plan sponsors
with an aggregate of approximately 1.9 million plan members. TennCare(R)
represented 1.2 million members.
Results of Operations
Three months ended March 31, 1998 compared to three months ended March 31, 1997
For the three months ended March 31, 1998, the Company recorded revenue of
$98.0 million compared with revenue of $70.8 million for the three months ended
March 31, 1997, an increase of $27.2 million. $17.6 million of the increase
resulted from servicing 14 new plans covering approximately 490,000 lives
throughout the United States as well as increased enrollment in existing
commercial plans. Sierra, enrolled in October 1997, accounted for $10.0 million
of the increased commercial revenue. TennCare(R) sponsors contributed an
additional $9.6 million
7
increase of revenue. In the last quarter of 1997, the Company entered into new
contracts with two TennCare(R) MCO's to which the Company previously provided
PBM services. These new contracts increased revenues by $17.1 million. In
addition, favorable contract renegotiations and increased enrollment in other
existing TennCare(R) sponsors increased revenues by $18.4 million. These
increases in TennCare(R) revenues were partially offset by a decrease of $25.9
million from the restructuring in April 1997 of a major TennCare(R) contract (as
discussed below). The contract was restructured from a risk-based (capitated)
arrangement to a non-risk (fee-for-service) arrangement, although the Company
continued to provide essentially the same services under the restructured
contract. During the three months ended March 31, 1998, approximately 39% of the
Company's revenues were generated from risk (capitated) contracts, compared to
68% during the three months ended March 31, 1997.
Cost of revenue for the quarter ended March 31, 1998 increased to $92.4
million from $66.8 million for the quarter ended March 31, 1998, an increase of
$25.6 million. New commercial contracts together with increased enrollment in
existing commercial plans resulted in $18.4 million of such increases in cost of
revenue. Such increase includes costs of $10.1 million resulting from the Sierra
Agreement which utilized $2.6 million of the reserve established at December 31,
1997. TennCare(R) contracts contributed $7.2 million of increased cost of
revenue. Costs relating to TennCare(R) contracts increased by $32.7 million due
to the two new TennCare(R) contracts referred to above ($16.5 million) and
eligibility increases in existing plans, increased drug prices, and increased
utilization of prescription drugs ($16.2 million). These costs were offset by
the above-mentioned restructuring of a major TennCare(R) contract, which
resulted in a decrease in cost of revenue of $25.5 million. As a percentage of
revenue, cost of revenue was 94.3% for the three months ended March 31, 1998
compared to 94.4% for the three months ended March 31, 1997.
Selling, general and administrative expenses were $4.5 million for the
three months ended March 31, 1998 compared to $3.9 million for the three months
ended March 31, 1997, an increase of 15%. The additional $.6 million reflects an
increase in the Company's revenue along with a continuing commitment to enhance
its ability to manage efficiently pharmacy benefits by investing in additional
operational and clinical personnel and information systems to support new and
existing customers. In addition, the Company experienced an increase in legal
fees. As a percentage of revenue, selling, general and administrative expenses
decreased to 4.5% for the three months ended March 31, 1998 from 5.5% for the
three months ended March 31, 1997.
For the three months ended March 31, 1998, the Company recorded interest
income of $.5 million compared with $.6 million for the three months ended March
31, 1997, a decrease of $.1 million. The decrease resulted from a lower level of
invested funds in the first quarter of 1998 compared to the first quarter of
1997. The level of invested funds decreased due to the operating needs of the
Company.
For the three months ended March 31, 1998, the Company recorded net income
of $1.6 million, or $.12 per basic share. This compares with net income of $.7
million, or $.06 per basic share, for the three months ended March 31, 1997.
This decrease is due largely to the above-described changes in revenue and cost
of revenues.
Liquidity and Capital Resources
For the three months ended March 31, 1998, net cash used in operating
activities totaled $9.5 million, primarily due to increases in receivables of
approximately $11.1 million resulting from increased revenues from both the
TennCare(R) and commercial contracts. Such uses were partially offset by
increases in claims payables of approximately $2.5 million. Investing activities
provided $5.8 million in cash due primarily to the proceeds from maturities of
investment securities of approximately $10.3 million, offset by the purchase of
new investment securities of approximately $4.0 million. The Company purchased
$.5 million of property and equipment, primarily to upgrade and enhance
information systems necessary to strengthen and support the Company's ability to
manage better its customers' pharmacy benefits programs.
At March 31, 1998, the Company had working capital of $13.0 million,
compared to $9.3 million at December 31, 1997. Cash and cash equivalents
decreased to $5.8 million at March 31, 1998 compared with $9.6 million at
December 31, 1997. The Company had investment securities held to maturity of
$16.3 million and $22.6 million at March 31, 1998 and December 31, 1997,
respectively. With the exception of the Company's $2.3 million preferred stock
investment in Wang Healthcare Information Systems, Inc. ("WHIS"), the Company's
investments are primarily corporate debt securities rated A or better and
government securities. In June 1997, the Company
8
invested $2.3 million in the preferred stock of WHIS, a company engaged in the
development, sales and marketing of PC-based information systems for physicians
and their staff, using image-based technology.
At March 31, 1998, the Company had, for tax purposes, unused net operating
loss carryforwards of approximately $18.3 million which will begin expiring in
2008. The amount of net operating loss carryforwards which may be utilized in
any given year may become limited by the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder, if a cumulative
change in ownership of more than 50% occurs within a three year period.
The Company believes that its financial condition and capital structure as
a result of its initial public offering (the "Offering") has enhanced its
ability to negotiate and obtain additional contracts with plan sponsors and
other potential customers. The Company believes that it has sufficient cash on
hand or available to fund the Company's anticipated working capital and other
cash needs for the foreseeable future.
The Company intends to offset, against profit sharing amounts, if any, due
RxCare in the future under the Company's contract with RxCare, approximately
$4.9 million, representing RxCare's share of the Company's cumulative losses and
amounts previously advanced or paid to RxCare.
As part of its continued efforts to expand its pharmacy management
business, the Company expects to incur additional sales and marketing expenses.
The Company also may pursue joint venture arrangements, business acquisitions
and other transactions designed to expand its pharmacy management business,
which the Company would expect to fund from cash on hand or future indebtedness
or, if appropriate, the sale or exchange of equity securities of the Company.
Other Matters
The Company's pharmaceutical claims costs historically have been subject
to a significant increase over annual averages from October through February,
which the Company believes is due to increased medical problems during the
colder months. Currently, non-risk contracts represented 61% of the Company's
revenue for the quarter ended March 31, 1998. Under non-risk contracts,
seasonally higher utilization no longer materially adversely effects the
Company's gross margin.
Changes in prices charged by manufacturers and wholesalers for
pharmaceuticals, a component of pharmaceutical claims, have historically
affected the Company's cost of revenue. The Company believes that it is likely
for prices to continue to increase which could have an adverse effect on the
Company's gross profit. To the extent such cost increases adversely effect the
Company's gross profit, the Company may be required to increase contract rates
on new contracts and upon renewal of existing contracts. However, there can be
no assurance that the Company will be successful in obtaining these increased
rates.
The TennCare(R) program has been controversial since its inception and has
generated federal and state government investigations and adverse publicity.
There can be no assurances that the Company's association with the TennCare(R)
program will not adversely affect the Company's business in the future.
On January 27, 1998, the Company and its wholly owned subsidiary, CMP
Acquisition Corp. ("CMP"), entered into an Agreement and Plan of Merger with
Continental Managed Pharmacy Services, Inc. ("Continental") and certain of its
principal shareholders. Upon consummation of the merger (the "Merger"), CMP and
Continental would merge, whereupon Continental would be the surviving
corporation and the separate corporate existence of CMP would terminate.
Thereafter, Continental would become a wholly owned subsidiary of the Company.
The Merger is subject to a number of customary conditions to closing. While it
is anticipated that the Merger would occur during the second quarter of 1998,
there can be no assurances that the Merger will be consummated at such time or
at all.
On April 14, 1998, the Company resolved its dispute with certain
subsidiaries of Sierra. As disclosed in the Company's Form 10-K, this dispute
related to the parties' divergent interpretations of certain provisions of the
Sierra Agreement, which led to Sierra's non-payment of certain invoiced amounts.
Under the terms of the settlement, both parties dismissed their respective
claims pending in the United States District Court, District of
9
Nevada and the American Arbitration Association. In addition, the parties
modified a number of provisions of the Sierra Agreement, including the addition
of a provision permitting any party to terminate the Sierra Agreement at any
time and for any reason upon 90 days' prior written notice. On May 8, 1998, the
Company notified Sierra of its intention to terminate the Sierra Agreement 90
days after notice thereof in accordance with the terms of the Sierra Agreement.
The Company continues to provide pharmacy benefit management services to Sierra
under the Sierra Agreement for such 90-day period.
Effective May 15, 1998, John H. Klein, currently the Company's Chief
Executive Officer, Chairman of the Board of Directors and a director, will
resign from all positions held with the Company, including Chief Executive
Officer, Chairman of the Board and director. Effective on that date, Richard H.
Friedman, currently the Company's Chief Operating Officer, Chief Financial
Officer and a director will succeed Mr. Klein as the Company's Chief Executive
Officer. Scott R. Yablon, currently a director of the Company, has agreed to
join the Company as an employee, and effective May 15, 1998, will assume the
titles of Chief Financial Officer and Chief Operating Officer of the Company.
PART II
OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
From August 14, 1996 through March 31, 1998, the $46,788,000 net proceeds
from the Offering, pursuant to a Registration Statement assigned file number
333-05327 by the Securities and Exchange Commission (the "Commission") and
declared effective by the Commission on August 14, 1996, have been applied in
the following approximate amounts:
Construction of plant, building and facilities..............$ -
Purchase and installation of machinery and equipment........$ 2,122,000
Purchases of real estate....................................$ -
Acquisition of other business...............................$ 2,300,000
Repayment of indebtedness...................................$ -
Working capital.............................................$20,207,000
Temporary investments:
Marketable securities...................................$16,343,000
Overnight cash deposits.................................$ 5,816,000
To date the Company has expended a relatively insignificant portion of the
Offering proceeds on expansion of the Company's "preferred generics" business
although, at the time of the Offering as disclosed in the prospectus related
thereto, the Company intended to apply approximately $18.6 million of Offering
proceeds to fund such expansion. As of the date of this filing, the Company has
not determined the ultimate amount or timing of application of Offering proceeds
to such use.
Item 5. Other Information
On January 27, 1998, the Company and its wholly owned subsidiary, CMP
Acquisition Corp. ("CMP") entered into an Agreement and Plan of Merger with
Continental and certain of its principal shareholders. Upon consummation of the
merger (the "Merger"), CMP and Continental would merge, whereupon Continental
would be the surviving corporation and the separate corporate existence of CMP
would terminate. Thereafter, Continental would become a wholly owned subsidiary
of the Company. The Merger is subject to a number of customary conditions to
closing. While it is anticipated that the Merger would occur during the second
quarter of 1998, there can be no assurances that the Merger will be consummated
at such time or at all.
On April 14, 1998, the Company resolved its dispute with certain
subsidiaries of Sierra. As disclosed in the Company's Form 10-K, this dispute
related to the parties' divergent interpretations of certain provisions of the
Sierra Agreement, which led to Sierra's non-payment of certain invoiced amounts.
Under the terms of the settlement, both parties dismissed their respective
claims pending in the United States District Court, District of Nevada and the
American Arbitration Association. In addition, the parties modified a number of
provisions of the
10
Sierra Agreement, including the addition of a provision permitting any party to
terminate the Sierra Agreement at any time and for any reason upon 90 days'
prior written notice. On May 8, 1998, the Company notified Sierra of its
intention to terminate the Sierra Agreement 90 days after notice thereof in
accordance with the terms of the Sierra Agreement. The Company continues to
provide pharmacy benefit management services to Sierra under the Sierra
Agreement for such 90-day period.
Effective May 15, 1998, Mr. Klein, currently the Company's Chief Executive
Officer, Chairman of the Board of Directors and a director, will resign from all
positions held with the Company, including Chief Executive Officer, Chairman of
the Board and director. Effective on that date, Mr. Friedman, currently the
Company's Chief Operating Officer, Chief Financial Officer and a director will
succeed Mr. Klein as the Company's Chief Executive Officer. Mr. Yablon,
currently a director of the Company, has agreed to join the Company as an
employee, and effective May 15, 1998, will assume the titles of Chief Financial
Officer and Chief Operating Officer of the Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Number Description
-------------- -----------
3(ii).1 Amended and Restated By-Laws of MIM Corporation
10.47 Separation Agreement, dated March 31, 1998, between MIM
Corporation and E. David Corvese.
10.48 Employment Agreement, dated February 1, 1998, between MIM
Corporation and Larry E. Edelson-Kayne.
27 Financial Data Schedule
(b) Reports on Form 8-K
The registrant did not file any Reports on Form 8-K during the quarter for which
this Report is filed.
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MIM Corporation
/s/ Richard H. Friedman
Date: May 14, 1998 -------------------------------------------------
Richard H. Friedman
Chief Operating Officer, Chief Financial Officer,
and Director
(Principal Financial Officer)
12