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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
( ) TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITES AND
EXCHANGE ACT OF 1934
Commission file number 33-67040
PARACELSUS HEALTHCARE CORPORATION
(Exact name of registrant as specified in its charter)
California 95-3565943
(State or other jurisdiction of (I.R.S. Employer
incorporation of organizaton) Identification No.)
(818) 792-8600
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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 and
Exchange Act during the preceeding 12 months and (2) has been subject
to such filing requirements for the past 90 days:
Yes X No
As of June 30, 1996, there were 450 shares of the Registrant's common stock,
no stated value, outstanding.
This document contains fourteen (15) pages. The exhibits begin on Page 14.
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Page 1
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PARACELSUS HEALTHCARE CORPORATION
FORM 10Q
NINE MONTHS ENDED
JUNE 30, 1996
TABLE OF CONTENTS
PART I. QUARTERLY FINANCIAL INFORMATION
PAGE OF
FORM 10-Q
Item 1. Financial Statements
Condensed Consolidated Balance Sheets - June 30, 1996
and September 30, 1995 3
Consolidated Statements of Income (unaudited) - for the
three and nine months ended June 30, 1996 and 1995 4
Consolidated Statements of Cash Flows (unaudited) - for
the three and nine months ended June 30, 1996 and 1995 5
Notes to Unaudited Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Page 2
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PARACELSUS HEALTHCARE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
JUNE 30,
1996 SEPTEMBER 30,
(UNAUDITED) 1995
ASSETS ---------- -------------
Current assets:
Cash and cash equivalents $ 1,902 $ 2,949
Marketable securities 15,590 10,387
Accounts receivable, net 108,923 81,039
Notes and other receivables 12,673 12,502
Supplies 10,426 10,565
Deferred income taxes 25,236 16,485
Other current assets 6,326 4,510
-------- ------------
Total current assets 181,076 138,437
Property and equipment 343,388 268,412
Less accumulated depreciation and amortization 97,661 102,746
--------- ------------
245,727 165,666
Marketable securities 10,039 12,169
Other assets 62,971 28,360
--------- ------------
Total Assets $ 499,813 $ 344,632
========= ============
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Bank drafts outstanding $ 2,856 $ 4,991
Accounts payable and other current liabilities 58,625 59,615
Current maturities of long-term debt
and capital lease obligations 438 8,658
Current portion of self-insurance reserves 5,309 4,792
--------- ------------
Total current liabilities 67,228 78,056
Long-term debt and capital lease obligations
less current maturities 284,643 113,070
Self-insurance reserves, less current portion 25,762 25,176
Deferred income taxes 24,688 23,255
Minority interests 147 126
Shareholder's equity:
Common stock 4,500 4,500
Additional paid-in capital 390 390
Unrealized gains (losses) on marketable securities (27) 137
Retained earnings 92,482 99,922
--------- ------------
Total shareholder's equity 97,345 104,949
--------- ------------
Total Liabilities and Shareholder's Equity $ 499,813 $ 344,632
========= ============
Note: The balance sheet at September 30, 1995 bas been derived from the
audited financial statements at that date and includes all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
See notes to unaudited condensed consolidated financial statements.
Page 3
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PARACELSUS HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME(UNAUDITED)
(DOLLARS IN THOUSANDS)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- -------------------
1996 1995 1996 1995
-------- -------- -------- --------
Total operating revenues $133,136 $123,545 $393,726 $375,901
Costs and expenses:
Salaries and benefits 56,772 52,652 169,934 159,955
Supplies 10,630 10,584 29,993 32,016
Purchased services 19,440 14,679 53,614 42,797
Provision for bad debts 8,994 9,172 29,185 28,455
Other operating expenses 21,846 21,915 68,752 69,916
Depreciation and amortization 4,684 4,251 12,656 12,985
Interest expense 5,216 3,952 12,901 11,604
Settlement costs - - 22,356 -
-------- -------- -------- -------
Total costs and expenses 127,582 117,205 399,391 357,728
Income(loss) before minority
interests and income taxes 5,554 6,340 (5,665) 18,173
Minority interests (1,144) (592) (2,216) (1,796)
-------- -------- -------- -------
Income(loss) before income taxes 4,410 5,748 (7,881) 16,377
Provision for income taxes
(benefit) 1,808 2,356 (3,232) 6,713
-------- -------- --------- -------
Net income(loss) $ 2,602 $ 3,392 $ (4,649) $ 9,664
======== ======== ======== =======
See accompanying notes
Page 4
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PARACELSUS HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)
(DOLLARS IN THOUSANDS)
NINE MONTHS ENDED
JUNE 30,
--------------------
1996 1995
OPERATING ACTIVITIES --------- ---------
Net income(loss) $ (4,649) $ 9,663
Adjustments to reconcile net income(loss)
to net cash provided by operating
activities:
Depreciation and amortization 12,656 12,985
Deferred income taxes (7,318) (4,326)
Minority interests 2,216 1,796
Changes in operating assets and
liabilities:
Accounts receivable (27,884) (3,180)
Supplies and other current assets (1,677) 348
Notes and other receivables (171) (118)
Bank drafts outstanding (2,136) 2,212
Accounts payable and other current
liabilities (990) (7,844)
Self-insurance reserves 1,103 628
--------- ---------
Net cash (used in) provided by operating
activities (28,850) 12,164
INVESTING ACTIVITIES
Purchase of marketable securities (3,225) (4,592)
Additions to property and equipment (91,186) (10,432)
Decrease in minority interests (2,195) (1,845)
Increase in other assets (36,153) (4,387)
--------- ---------
Net cash used in investing activities (132,759) (21,256)
FINANCING ACTIVITIES
Long-term borrowings 232,000 36,000
Payments of long-term debt and capital
lease obligations (68,647) (21,620)
Dividends to shareholder (2,791) (4,521)
--------- ---------
Net cash provided by financing activities 160,562 9,859
--------- ---------
Increase(decrease) in cash and cash
equivalents (1,047) 767
Cash and cash equivalents at beginning
of period 2,949 1,452
--------- ---------
Cash and cash equivalents at end of period $ 1,902 $ 2,219
========= =========
- ----------------------------------------------------------------------
| |
|Supplementary cash flow information: |
| Cash paid during the period for: |
| Income taxes $ 5,531 $ 9,728 |
| Interest 13,786 13,077 |
| |
|Details of unrealized (losses)gains on |
| marketable securites: |
| Marketable securities (278) 5 |
| Deferred taxes 114 2 |
| --------- --------- |
| Increase(decrease) in shareholder's |
| equity $ (164) $ 3 |
| ========= ========= |
- ----------------------------------------------------------------------
See accompanying notes
Page 5
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PARACELSUS HEALTHCARE CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
NOTE 1. BASIS OF PRESENTATION
The interim condensed consolidated financial statements included herein have
been prepared by Paracelsus Healthcare Corporation (the "Company") without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission (the "SEC"). Certain information and footnote disclosures,
normally included in the financial statements prepared in accordance with
generally accepted accounting principles, have been condensed or omitted
pursuant to such SEC rules and regulations; nevertheless, the management of
the Company believes that the disclosures herein are adequate to make the
information presented not misleading. It is suggested that these condensed
consolidated financial statements be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
most recent Annual Report on Form 10-K, filed with the SEC in December 1995.
In the opinion of managment, all adjustments, consisting only of normal
recurring adjustments necessary to present fairly the consolidated financial
position of the Company with respect to the interim condensed consolidated
financial statements, and the consolidated results of its operations and its
cash flows for the interim periods then ended, have been included. The
results of operations for the interim periods are not necessarily indicative
of the results for the full year.
ITEM 2. MARKETABLE SECURITIES
On November 15, 1995, the FASB staff issued a Special Report, A Guide to
Implementation of Statement 115 on Accounting for Certain Investments in Debt
and Equity Securities. In accordance with provisions in that Special Report,
the Company chose to reclassify securities from held-to-maturity to
available-for-sale. At the date of transfer the amortized cost of those
securities was $2,000,000 and the unrealized loss on those securities was
$13,000, which was included in shareholder's equity.
ITEM 3. CONTINGENCIES
The Company is subject to claims and suits in the ordinary course of
business, including those arising from care and treatment afforded at the
Company's facilities and maintains insurance and, where appropriate, reserves
with respect to the possible liability arising from such claims. Management
believes the ultimate resolution of the proceedings presently pending against
the Company (or any of its subsidiaries) will not have a material effect on
the Company's financial positon, results of operations, or cash flows.
Page 6
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PARACELSUS HEALTHCARE CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONT.
June 30, 1996
NOTE 4. ACQUISITIONS/CLOSURES
On August 9, 1996, the stockholders of Champion Healthcare
Corporation ("Champion"), at a special meeting of stockholders adopted and
approved an Agreement and Plan of Merger dated as of April 12, 1996, as
amended and restated as of May 29, 1996(the "Merger Agreement")and as it may
be amended, supplemented or modified from time to time, by and among the
Company, PC Merger Sub, Inc., a Delaware Corporation and wholly owned
subsidiary of the Company, and Champion, pursuant to which such wholly owned
subsidiary of the Company will be merged with and into Champion, resulting in
Champion becoming a wholly owned subsidiary of the Company. The Company
expects the merger to consummate on or about August 16, 1996 after satisfying
certain other terms and conditions of the Merger Agreement. Upon consummation
of the merger, each share of Champion's common stock and preferred stock will
convert to one share and two shares of the Company's stock, respectively. Dr.
Manfred George Krukmeyer, currently the Chairman of the Board and sole
shareholder of the Company, and members of the Company's management will own
60% of the combined company, with current Champion security holders owning
the remaining 40%.
On May 17, 1996, the Company acquired the PHC Salt Lake Regional Hospital, a
125-bed acute care hospital, including its surrounding campus, in Salt Lake
City, Utah from FHP for $70.0 million in cash. The Company financed the
acquisition with borrowings under the Credit Facility.
On May 17, 1996, the Company acquired Pioneer Valley Hospital, a 139-bed
hospital in West Valley City, Utah; Davis Hospital and Medical Center, a
120-bed hospital in Layton, Utah; and Santa Rosa Medical Center, a 129-bed
hospital in Milton, Florida from Columbia/HCA Healthcare
Corporation("Columbia"). The consideration for these hospitals consisted of
$38.5 million in cash and the exchange of the Company's Peninsula Medical
Center, a 119-bed hospital located in Ormond Beach, Florida; Elmwood Medical
Center, a 135-bed hospital located in Jefferson, Louisiana; and Halstead
Hospital, a 190-bed hospital located in Halstead, Kansas. The Company also
purchased the real property of Elmwood and Halstead from a real estate
investment trust ("REIT"), exchanged the Elmwood and Halstead real property
for Pioneer's real property and sold the Pioneer real property to the REIT.
The acquisition of the Columbia hospitals was accounted for as a purchase
transaction. The Company financed the cash portion of the acquisition from
borrowings under the Credit Facility.
Page 7
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PARACELSUS HEALTHCARE CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
NOTE 4. ACQUISITIONS/CLOSURES - CONT.
On March 15, 1996 the Company closed Desert Palms Community Hospital, an
acute care hospital located in Palmdale, California.
NOTE 5. SETTLEMENT COSTS
During March 1996, the Company settled two lawsuits in connection with the
operation of its psychiatric programs. The Company recognized a charge for
settlement costs totaling $22.4 million in the quarter ended March 31, 1996,
for the payment of legal fees associated with these two lawsuits, the
settlement payments, and the write off of certain psychiatric accounts
receivables. The Company did not admit liability in either case but resolved
its dispute through the settlements in order to re-establish a business
relationship and/or avoid further legal costs in connection with the disputes.
Page 8
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PART I: FINANCIAL INFORMATION
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The results of operations discussed below compare the operating results for
the three and nine months ended June 30, 1996 to the operating results for
the three and nine months ended June 30, 1995. The Company closed Bellwood
Health Center in April 1995 and closed Desert Palms Community Hospital in
March 1996, which will be referred to as "the Closed Facilities", sold
Elmwood Medical Center, Halstead Hospital and Peninsula Medical Center, which
will be referred to as the "Sold Facilities", and purchased Davis Hospital
and Medical Center, Pioneer Valley Hospital, PHC Salt Lake Hospital and Santa
Rosa Medical Center, which will be referred to as the "Acquired Facilities".
Operating revenues increased 7.8% to $133,136,000 for the three months ended
June 30, 1996 from $123,545,000 for the comparable period in the prior year.
This increase was mainly due to the net revenue of the acquired facilities
which exceeded the net revenue of the sold facilities by $11,009,000, and an
increase of $1,827,000 in home health agency operating revenues generated in
the Eastern Region, resulting from an increase of 21,210, or 14.5%, in home
health agency visits.
Operating revenues increased 4.7% to $393,726,000 for the nine months ended
June 30, 1996 from $375,901,000 for the comparable period in the prior year.
This increase was mainly due to the net revenue of the acquired facilities
which exceeded the net revenue of the sold facilities by $9,077,000 and an
increase of $9,683,000 in the home health agency operating revenues generated
in the Eastern Region, resulting from an increase of 147,163, or 37.9%, in
home health agency visits.
Salaries and benefits increased 7.8% to $56,772,000 for the three months
ended June 30, 1996 from $52,652,000 for the comparable period in the prior
year. This increase was principally due to a net increase of $2,658,000
between the three month periods in the salaries and benefits of the acquired
facilities compared to the salaries and benefits of the sold facilities and a
13.4% increase in the employee workforce in the Eastern Region. The increase
was mainly attributed to the expansion of the home health agency programs in
the Eastern Region. As a percent of operating revenues, salaries and benefits
were 42.6% for the three months ended June 30, 1996 and June 30, 1995.
Page 9
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RESULTS OF OPERATIONS - CONT.
Salaries and benefits increased 6.2% to $169,934,000 for the nine months
ended June 30, 1996 from $159,955,000 for the comparable period in the prior
year. This increase was mainly due to a net increase between the nine month
periods of $4,968,000 in the salaries and benefits of the acquired facilities
compared to the salaries and benefits of the sold facilities, and a 13.9%
increase in the employee workforce in the Eastern Region to service the
expansion of the home health agency programs. In addition, the employee
workforce was increased in the Eastern Region to service the increased volume
of outpatient services. As a percent of operating revenues, salaries and
benefits increased to 43.2% for the nine months ended June 30, 1996 from
42.6% for the comparable period in the prior year.
Supplies increased .4% to $10,630,000 for the three months ended June 30,
1996 from $10,584,000 for the comparable period in the prior year. Supplies
decreased 6.3% to $29,993,000 for the nine months ended June 30, 1996 from
$32,016,000 for the comparable period in the prior year. The Company
subcontracted its pharmacy purchases and management activities to a pharmacy
management company in June 1995 which resulted in reductions in pharmacy
supplies expense for the three and nine months ended June 30, 1996, of
$729,000 and $3,605,000 as compared to the three and nine months ended June
30, 1995, respectively. The Company also reduced its non-pharmacy supplies
expense due to improved purchasing terms and price reductions received under
its group purchasing contract. As a percent of operating revenues, supplies
decreased to 8.0% for the three months ended June 30, 1996 from 8.6% in the
comparable period in the prior year, and to 7.6% for the nine months ended
June 30, 1996 from 8.5% for the comparable period in the prior year.
Purchased services increased 32.4% to $19,440,000 for the three months ended
June 30, 1996 from $14,679,000 for the comparable period in the prior year.
The increase was mainly due to the pharmacy management company contract which
increased purchased services by $1,246,000 and the out of network purchased
services for the acquired PHC Salt Lake Regional Hospital by $1,800,000. As
a percent of operating revenues, purchased services increased to 14.6% for
the three months ended June 30, 1996 from 11.9% for the comparable period in
the prior year.
Purchased services increased 25.2% to $53,614,000 for the nine months ended
June 30, 1996 from $42,797,000 for the comparable period in the prior year
due to the pharmacy management company contract which increased purchased
services by $4,800,000, the out of network purchased services for the
acquired PHC Salt Lake Regional Hospital by $1,800,000, and an increase in
purchased services of $914,000 in the home health agency programs in the
Eastern Region. As a percent of operating revenues, purchased services
increased to 13.6% for the nine months ended June 30, 1996 from 11.4% for the
comparable period in the prior year.
Provision for bad debts decreased 2.0% to $8,994,000 for the three months
ended June 30, 1996 from $9,172,000 for the comparable period in the prior
year. As a percent of operating revenues, the provision for bad debts
decreased to 6.8% for the three months ended June 30, 1996 from 7.4% in the
comparable period in the prior year.
Page 10
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RESULTS OF OPERATIONS - CONT.
Provision for bad debts increased 2.6% to $29,185,000 for the nine months
ended June 30, 1996 from $28,455,000 for the comparable period in the prior
year due primarily to an increase in provision for bad debts at the
psychiatric facilities. The increase in the provision for bad debts at two of
the psychiatric facilities is attributed to reductions in payments received
from the managed care providers for psychiatric services. As a percent of
operating revenues, provision for bad debts decreased to 7.4% for the nine
months ended June 30, 1996 from 7.6% for the comparable period in the prior
year.
Depreciation and amortization increased 10.2% to $4,684,000 for the three
months ended June 30, 1996 from $4,251,000 in the comparable period in the
prior year. This increase was principally due to the acquired facilities.
Depreciation and amortization decreased 2.5% to $12,656,000 for the nine
months ended June 30, 1996 from $12,985,000 in the comparable period in the
prior year. This decrease was mainly attributable to the reductions from the
closed facilities exceeding the additional depreciation and amortization from
the acquired facilities.
Interest expense increased 31.9% to $5,216,000 for the three months ended
June 30, 1996 from $3,952,000 in the comparable period in the prior year.
Interest expense increased 11.2% to $12,901,000 for the nine months ended
June 30, 1996, from $11,604,000 for the comparable period in the prior year.
This increase was principally due to the borrowings under the Credit Facility
for the acquired facilities and the settlement of the two lawsuits.
During March 1996, the Company recognized a charge for settlement of two
lawsuits totaling $22,356,000. The charge included the payment of legal fees
associated with the lawsuits, the settlement payments, and the write off of
certain psychiatric accounts receivables. See Note 5 in the Notes to
Unaudited Condensed Consolidated Financial Statements for further explanation.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital as of June 30, 1996 was $113,848,000, an
increase of $53,467,000 from September 30, 1995. The increase in working
capital is primarily attributable to decreases in current maturities of
long-term debt obligations and capital leases obligations, and an increase in
accounts receivable, marketable securities and deferred income taxes. The
increase in accounts receivable is mainly attributable to the accounts
receivable generated by the four acquired facilities which amounted to
$14,285,000, and the increase in psychiatric receivables and home health care
receivables which take longer to collect than the Company's acute care
receivables. The decrease in current maturities of long-term debt
obligations and capital lease obligations is attributed to the refinancing of
mortgage debt on one of the Company's partnerships, and the pay-off of
mortgage and capital lease debt at the three facilities sold to Columbia.
Other significant changes in working capital included an increase in the
marketable securities investments made by the Company's captive insurance
company and an increase in deferred income taxes resulting from the deferred
tax benefits associated with the settlement costs.
Page 11
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LIQUIDITY AND CAPITAL RESOURCES - CONT.
On December 8, 1995, the Company entered into a new Credit Facility which
provides up to $230,000,000 of revolving credit. The Credit Facility was
increased to finance future acquisitions, refinance the existing Credit
Facility borrowings and for general corporate purposes, including working
capital and capital expenditures. Borrowings under the Credit Facility were
increased from $27,500,000 at September 30, 1995 to $198,000,000 at June 30,
1996. The additional borrowings were used to finance the acquisition of the
Columbia and FHP hospitals, the settlement of the two lawsuits, acquisitions
of property, plant and equipment and for working capital purposes. The
Company anticipates that existing capital sources and internally generated
cash flows will be sufficient to fund capital expenditures, debt service and
working capital requirements.
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121 ("SFAS No. 121"), Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of,"
which requires impairment losses to be reccorded on long-lived assets used in
operations when indicators of impairment are present and the undiscontinued
cash flows estimated to be generated by those assets are less than the
assets' carrying amount. SFAS No. 121 also addresses the accounting for
long-lived assets that are expected to be disposed of. The Company will adopt
SFAS No. 121 on October 1, 1996, and, based on current circumstances, does
not believe the effect of the adoption will be material.
IMPACT OF INFLATION AND CHANGING PRICES
A significant portion of the Company's operating expenses are subject to
inflationary increases, the impact of which the Company has historically been
able to substantially offset through price increases, by expanding services
and by increasing operating efficiencies. To the extent that inflation occurs
in the future, however, the Company may not be able to pass on the increased
costs associated with providing health care services to patients with
govenment or managed care payors unless such payors correspondingly increase
reimbursement rates.
Page 12
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No material change has occurred in the litigation described in
"Item 3. Legal Proceedings" on page 15 of the Company's Annual Report
on Form 10-K for the year ended September 30, 1995, except for the
settlement of the two lawsuits with the insurance company as
disclosed in Note 5 of Form 10Q.
ITEM 2. CHANGE IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
The Company has filed a registration statement on Form S-1 dated
June 28, 1996, as amended, for a proposed offering of common stock
(the "Equity Offering"). Currently the Company expects to sell
5,200,000 shares and selling shareholders of the Company are
expected to offer an additional 229,000 shares. Additionally, the
underwriters have the option to purchase an additional 814,350 shares
to cover over-allotments, if any. The Company's current registration
statement contemplates a proposed maximum offering price of $10.25
per share, which would result in net proceeds to the Company after
estimated underwriting discounts and commissions of approximately
$49,800,000. The Equity Offering is expected to be consummated on
or about August 16, 1996. The final offering price and total number
of shares to be offered by the Company and the selling shareholders
are subject to finalization and may differ from those amounts
currently contemplated.
The Company has filed a registration statement on Form S-1 dated
June 24, 1996, as amended, for a proposed offering of $325,000,000
aggregrate principal amount of Senior Subordinated Notes due 2006
(the "Note Offering"). The company expects the Notes to bear interest
at approximately 10% per annum. The Notes Offering is expected to be
consummated on or about August 16, 1996. The final terms of the Notes
Offering are subject to finalization and may differ from the terms
currently contemplated.
If consummated, the Company expects to use a portion of the net
proceeds from the Notes Offering and Equity Offering to prepay certain
outstanding indebtedness and reduce other outstanding indebtedness.
Page 13
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
- Amendment No. 1 on Form 8-K/A to Form 8-K Current
Report filed on May 17, 1996 providing Financial
Statements of Businesses Acquired and the Pro Forma
Financial Information.
- Form 8-K Current Report filed on May 17, 1996
disclosing the acquisition of Davis Hospital and
Medical Center, and the asset exchange among
Paracelsus Halstead Hospital, Paracelsus Elmwood
Medical Center, Paracelsus Peninsula Medical Center,
Paracelsus Real Estate Corporation, Pioneer Valley
Hospital, Inc., and the Medical Center of Santa Rosa,
Inc., and the acquisition of Pioneer Valley Hospital
and Santa Rosa Medical Center, in exchange for
Halstead Hospital, Elmwood Medical Center, and
Peninsula Medical Center.
- Form 8-K filed on May 29, 1996 disclosing the Company
entering into the Amended and Restated Merger
Agreement with Champion Healthcare Corporation, and
PC Merger Sub, Inc.
Page 14
<PAGE>
PARACELSUS HEALTHCARE CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this quarterly report to be signed on its behalf by
the undersigned thereunto duly authorized.
PARACELSUS HEALTHCARE CORPORATION
Date: August 14, 1996 By: \s\ JAMES T. RUSH
---------------------------
James T. Rush
Vice President, Finance and
Chief Financial Officer
(principal financial officer)
Date: August 14, 1996 By: \s\ SCOTT K. BARTON
---------------------------
Scott K. Barton
Assistant Vice President
and Corporate Controller
(principal accounting officer)
Page 15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,902
<SECURITIES> 15,590
<RECEIVABLES> 121,596
<ALLOWANCES> 0
<INVENTORY> 10,426
<CURRENT-ASSETS> 181,076
<PP&E> 343,388
<DEPRECIATION> 97,661
<TOTAL-ASSETS> 499,813
<CURRENT-LIABILITIES> 67,228
<BONDS> 335,240
0
0
<COMMON> 4,500
<OTHER-SE> 92,845
<TOTAL-LIABILITY-AND-EQUITY> 499,813
<SALES> 0
<TOTAL-REVENUES> 393,726
<CGS> 0
<TOTAL-COSTS> 357,305
<OTHER-EXPENSES> 2,216
<LOSS-PROVISION> 29,185
<INTEREST-EXPENSE> 12,901
<INCOME-PRETAX> (7,881)
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