<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter period ended April 30, 1997
--------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number
0-14003
-----------
ROTECH MEDICAL CORPORATION
--------------------------
(Exact name of Registrant as specified on its Charter)
<TABLE>
<S> <C>
Florida 59-2115892
- --------------------------------------- -----------------------------
(State of jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
4506 L.B. McLeod Road, Suite F, Orlando, Florida 32811
- ----------------------------------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (407) 841-2115
- ----------------------------------------------------------------------------------------------------------
</TABLE>
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 of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
---
Indicate the number of shares outstanding of each class of issuer's classes of
common stock as of June 12, 1997: 26,171,792
<PAGE>
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
- ------------------------------------------------------------------------------
Index
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets,
Interim at April 30, 1997 and Year End at July
31, 1996 1
Condensed Consolidated Interim Statements of
Income for the Three Months and Nine Months
Ended April 30, 1997 and 1996 2
Condensed Consolidated Interim Statements of
Shareholders' Equity for the Nine Months Ended
April 30, 1997 and 1996 3
Condensed Consolidated Interim Statements of
Cash Flows for the Nine Months Ended April 30,
1997 and 1996 4
Notes to Condensed Consolidated Interim
Financial Statements 5-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-10
Part II. Other Information 11
Signature 12
</TABLE>
<PAGE>
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Condensed Consolidated Balance Sheet
<TABLE>
<CAPTION>
April 30 July 31
1997 1996
---------------------------------------
ASSETS (Unaudited)
<S> <C> <C>
Current Assets:
Cash $ 8,738,227 $ 6,438,760
Accounts Receivable:
Trade, less allowance for doubtful accounts 114,134,789 83,486,610
Other 2,743,490 3,468,193
Inventories 20,151,931 15,191,011
Prepaid Assets 3,710,114 3,883,830
------------------ -----------------
Total Current Assets 149,478,551 112,468,404
Property and equipment, less accumulated depreciation 114,846,823 85,414,544
Intangible assets, less accumulated amortization 252,433,465 168,101,082
Other assets 1,807,938 8,630,288
------------------ -----------------
TOTAL ASSETS $518,566,777 $ 374,614,318
================== =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other liabilities $ 24,524,388 $24,330,808
Notes payable to banks 162,013,900 52,055,008
Deferred income taxes 135,800 75,299
------------------ -----------------
Total Current Liabilities 186,674,088 76,461,115
Deferred Income Taxes 17,356,478 11,831,155
Convertible Subordinated Debentures 110,000,000 110,000,000
Redeemable Common Stock 3,322,175 1,646,933
Shareholders' Equity:
Common Stock, par value $.0002 per share, 50,000,000
shares authorized, 23,789,399 shares in 1997 and
23,303,586 shares in 1996 issued and outstanding 4,766 4,669
Treasury stock, at cost (814,535) (814,535)
Additional paid-in capital 127,403,001 122,757,377
Retained earnings 74,620,804 52,727,604
------------------ -----------------
201,214,036 174,675,115
------------------ -----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $518,566,777 $374,614,318
================== =================
</TABLE>
Note: The consolidated balance sheet at July 31, 1996 has been condensed from
the audited financial statements at that date.
See notes to condensed consolidated interim financial statements.
1
<PAGE>
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Condensed Consolidated Interim Statements of Income
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
April 30 April 30 April 30 April 30
1997 1996 1997 1996
----------------- ----------------- ----------------- -----------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Operating revenue $109,431,604 $72,983,865 $297,574,404 $179,566,243
Cost and Expenses:
Cost of revenue 26,477,895 20,281,706 77,090,828 49,312,209
Selling, general and administrative 55,031,932 34,862,199 145,710,671 86,602,076
---------- ---------- ----------- ----------
Income before interest, taxes, depreciation
and amortization 27,921,777 17,839,960 74,772,905 43,651,958
---------- ---------- ---------- ----------
Depreciation and amortization 11,027,259 7,739,381 30,343,973 17,501,895
Interest 3,649,048 1,761,293 9,214,066 3,098,014
----------------- ----------------- ----------------- -----------------
Income before income taxes 13,245,470 8,339,286 35,214,866 23,052,049
Income tax expense 4,979,163 2,897,933 13,321,666 8,356,368
----------------- ----------------- ----------------- -----------------
Net Income $8,266,307 $ 5,441,353 $21,893,200 $ 14,695,681
================= ================= ================= =================
Net income per share:
Primary $0.31 $0.22 $0.84 $0.60
Fully diluted $0.30 $0.22 $0.81 $0.60
Weighted average number of shares outstanding:
Primary 26,580,443 24,927,156 26,186,355 24,353,982
Fully diluted 31,193,500 25,299,450 30,728,710 24,679,950
</TABLE>
See notes to consolidated interim financial statements.
2
<PAGE>
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Condensed Consolidated Interim Statements of Shareholders' Equity
<TABLE>
<CAPTION>
Common Stock Additional
-------------------------- Treasury Paid-in Retained
Shares Amount Stock Capital Earnings
------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Balance, August 1, 1995 22,843,642 $4,586 $(814,535) $118,029,198 $32,439,271
Issuance of Common Stock in
acquisition of subsidiaries 299,816 60 3,018,853
Issuance of Common Stock pursuant
to Employee Stock Compensa-
tion Plan 38,170 8 256,292
Issuance of Common Stock pursuant
to exercise of stock options 114,000 22 1,215,590
Issuance, repurchase and retirement
of Common Stock pursuant to
exercise of stock options and
related put options (138,597)
Net income for the nine months
ended April 30, 1996 14,695,681
------------------------------------------------------------------------------
Balance, April 30, 1996 23,295,628 $4,676 $(814,535) $122,519,933 $46,996,353
============== ========== ============= =============== ================
Balance, August 1, 1996 23,303,586 $4,669 $(814,535) $122,757,377 $52,727,604
Issuance of Common Stock in
acquisitions of subsidiaries 422,801 84 4,291,122
Issuance of Common Stock pursuant
to exercise of stock options 50,000 10 182,280
Issuance of Common Stock pursuant
to Employee Stock
Compensation Plan 13,012 3 172,223
Net income for the nine months ended
April 30, 1997 21,893,200
------------- ---------- ------------- --------------- ----------------
Balance, April 30, 1997 23,789,399 $4,766 $(814,535) $127,403,001 $74,620,804
============== ========== ============= =============== ================
</TABLE>
See notes to condensed consolidated interim financial statements.
3
<PAGE>
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Condensed Consolidated Interim Statements of Cash Flows
<TABLE>
<CAPTION>
Nine Months Ended
April 30 April 30
1997 1996
-------------------------------------------
(Unaudited)
<S> <C> <C>
Net Cash Provided by Operating Activities $35,012,760+ $17,925,633
Investing Activities
Purchases of property and equipment (36,608,838) (20,869,030)
Changes in advances and deposits (250,719) (1,820,791)
Payments for acquisition of net assets, net of cash acquired (106,584,855) (105,532,796)
-------------------- --------------------
Net Cash Used in Investing Activities (142,844,412) (128,222,617)
Financing Activities
Net proceeds from long-term debt and notes payable 109,958,892 114,704,024
Proceeds from issuance of Common Stock 172,227 925,094
Repurchase of Common Stock (418,351)
-------------------- --------------------
Net Cash Provided by Financing Activities 110,131,119 115,210,767
Increase in Cash 2,299,467 4,913,783
Cash at Beginning of Period 6,438,760 577,283
-------------------- --------------------
Cash at End of Period $8,738,227 $ 5,491,066
==================== ====================
</TABLE>
See notes to condensed consolidated interim financial statements.
4
<PAGE>
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited)
Note A - Basis of Reporting
The condensed consolidated interim balance sheet as of April 30, 1997 and the
condensed consolidated interim statements of income, shareholders' equity and
cash flows for the nine months ended April 30, 1997 and 1996 are unaudited. In
the opinion of management, these statements have been prepared on the same basis
as the audited consolidated financial statements and include all adjustments,
consisting only of normal recurring accruals, necessary for the fair statement
of the results of the interim periods.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These condensed consolidated financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's consolidated audited financial statements as
of and for the year ended July 31, 1996. The results of operations for the
interim period are not necessarily indicative of the results which may be
expected for an entire year.
Note B - Property and Equipment
Property and equipment is depreciated over three to seven years. Rental
equipment is depreciated over five years.
Note C - Intangible Assets
Intangible assets consists of the following as of April 30, 1997:
<TABLE>
<S> <C>
Excess of cost over fair value of net assets acquired and liabilities assumed $249,781,185
Non-compete agreements 30,103,435
Other intangibles 1,948,894
------------
281,833,514
Less accumulated amortization 29,400,049
------------
$252,433,465
============
</TABLE>
Intangible assets are amortized over five to twenty-five years on a straight-
line basis. The excess of cost over fair value of net assets acquired and
liabilities assumed includes, but is not limited to, patient and referral lists,
business names and goodwill related to purchase transactions completed by the
Company.
Note D - Notes Payable to Banks
On June 3, 1997, the Company expanded its $200,000,000 syndicated bank credit
facility to $300,000,000, of which approximately $129,000,000 was available on
that date. The credit facility carries a negative pledge on all Company assets
and requires compliance by the Company with certain financial and negative
convenants, including a restriction on cash dividends. The syndicated bank line
of credit is payable on demand and provides for an interest rate to be selected
by the Company based on either the prime rate or LIBOR plus 0.80%, which
approximated 6.5% on June 3, 1997.
Note E - Shareholders' Equity
On May 21, 1996, the Company distributed a 100% common stock dividend to
shareholders of record as of April 30, 1996 to effect a 2-for-1 stock split.
Shareholders' equity has been restated to give retroactive recognition to the
stock split for all periods presented by reclassifying from additional paid in
capital to common stock the par value of the additional shares arising from the
split. In addition, for all periods presented, all references in the
consolidated financial statements and footnotes thereto to number of shares, per
share amounts, weighted average shares outstanding, as well as stock option and
related price information have been restated to give retroactive effect to the
split.
During the nine months ended April 30, 1997, the Company issued 422,801 shares
of its Common Stock as partial consideration for the purchase of several home
health care companies. The Company holds 1,975,266 shares in escrow related to
acquisitions as contingent shares to be released upon the development of future
events, with such measurement dates from May 1,1997 to March 29, 2000.
5
<PAGE>
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited)
During the nine months ended April 30, 1997, options were granted to certain
employees for the purchase of 410,000 shares of Common Stock at prices ranging
from $13.875 to $18.00 per share subject to the terms stated in the Company's
Stock Option Plans.
Note F - Subsequent Events
During the period from May 1, 1997 through June12, 1997, the Company completed
the acquisitions of the net assets or stock of 16 companies in 12 states, using
a combination of $22,273,960 cash and 19,048 shares of its Common Stock.
Note G - Pro Forma Condensed Combined Statements of Income
The pro forma condensed combined statement of income for the year ended July 31,
1996 has been prepared to illustrate the estimated combined effects of the
various Agreements of Purchase and Sale (Agreements) upon RoTech Medical
Corporation (the Company) for those acquisition transactions consummated between
August 1, 1996 and June 1, 1997. The pro forma condensed combined statement of
income was derived by adjusting the historical statement of income for the year
ended July 31, 1996 of the Company and the unaudited historical statements of
income for the most recent fiscal year end of the unaudited acquired entities.
The pro forma condensed combined interim statement of income for the nine months
ended April 30, 1997 was derived by adjusting the unaudited interim historical
statement of income for the nine months ended April 30, 1997 of the Company and
the unaudited interim historical statements of income of the acquired entities
for the period prior to their respective inclusion in the unaudited interim
historical statement of income of the Company for the nine months ended April
30, 1997. The entities acquired prior to April 30, 1997 are included in the
Company's balance sheet as of April 30, 1997.
The operations of any entities acquired subsequent to April 30, 1997 are not
included in the Company's historical interim statement of income as presented
herein. The net assets of any entities acquired subsequent to April 30, 1997 are
not included in the Company's balance sheet as of April 30, 1997.
The pro forma condensed combined statements of income were prepared as if the
purchases and sales had occurred on the first day of the respective periods
presented. The pro forma condensed combined statements of income presented are
not necessarily indicative of the results of operations that might have occurred
had such transactions been completed as of the date specified or of the results
of operations of the Company and its subsidiaries for any future period.
No changes in operating revenue and expenses have been made to reflect the
results of any modification to operations that might have been made had the
Agreements been consummated on the aforesaid assumed effective date for purposes
of presenting pro forma results. The proforma condensed combined statements of
income include amortization of goodwill as if the Agreements had been completed
on the assumed effective date referred to above.
The pro forma condensed combined statements of income should be read in
conjunction with the audited consolidated financial statements and related notes
thereto.
(a) Amortization on intangibles recorded in the combined acquisitions
(amortized over lives from 5 to 25 years).
(b) Additional interest expense related to borrowings for cash paid to
acquire combined entities; assumed borrowed on the first day of the
respective periods presented.
(c) Adjustment to income tax expense for the tax expense relating to the
net income as adjusted for the combined acquired entities. Income taxes
are calculated on the basis that operations of the consolidated company
could be combined as one company for federal income tax purposes at the
actual historical rate for the period.
(d) Additional shares of the Company's Common Stock issued pursuant to the
Agreements; assumed issued on the first day of the respective periods
presented.
6
<PAGE>
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Notes to Consolidated Interim Financial Statements
(Unaudited)
Note G - Pro Forma Condensed Combined Statements of Income - Continued
Pro Forma Condensed Combined Statement of Income
<TABLE>
<CAPTION>
For the Year Ended July 31, 1996
----------------------------------------------------------------------------
(Unaudited)
RoTech Medical
Corporation
RoTech Medical Combined Combined
Corporation Acquired Pro Forma Pro Forma
Consolidated Entities Adjustments Results
------------------- ------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Operating revenue $263,029,963 $94,378,773 $357,408,736
Cost and expenses:
Cost of revenue 71,012,877 30,703,746 101,716,623
Selling, general and administrative 127,357,013 44,160,009 171,517,022
Depreciation and amortization 26,519,480 3,269,053 $5,072,981 (a) 34,861,514
Interest 5,228,318 948,784 7,603,779 (b) 13,780,881
------------- --------------- ---------------- ----------------
230,117,688 79,081,592 12,676,760 321,876,040
------------- --------------- ---------------- ----------------
Income before income taxes 32,912,275 15,297,181 (12,676,761) 35,532,695
Income tax expense 12,356,500 162,128 806,133 (c) 13,324,761
------------- --------------- ---------------- ----------------
Net income $ 20,555,775 $15,135,053 $(13,482,893) $ 22,207,935
============= =============== ================ ================
Net income per share:
Primary $0.83 $0.88
Fully diluted $0.82 $0.86
Weighted average number of shares outstanding:
Primary 24,657,000 496,387 (d) 25,153,387
Fully diluted 25,206,000 496,387 (d) 25,702,387
</TABLE>
7
<PAGE>
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Notes to Consolidated Interim Financial Statements
(Unaudited)
Note G - Pro Forma Condensed Combined Statements of Income - Continued
Pro Forma Condensed Combined Interim Statement of Income
<TABLE>
<CAPTION>
For the Nine Months Ended April 30, 1997
----------------------------------------------------------------------------
(Unaudited)
RoTech Medical
Corporation
RoTech Medical Combined Combined
Corporation Acquired Pro Forma Pro Forma
Consolidated Entities Adjustments Results
------------------- ------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Operating revenue $297,574,404 $38,368,018 $334,942,422
Cost and expenses:
Cost of revenue 77,090,828 12,505,009 89,595,837
Selling, general and administrative 145,710,671 17,019,182 162,729,853
Depreciation and amortization 30,343,973 1,322,074 $1,937,284 (a) 33,603,331
Interest 9,214,066 329,353 3,062,152 (b) 12,605,571
------------- --------------- ---------------- ----------------
262,359,538 31,175,618 4,999,436 298,534,592
------------- --------------- ---------------- ----------------
Income before income taxes 35,214,866 7,192,400 (4,999,436) 37,407,830
Income tax expense 13,321,666 59,134 647,136 (c) 14,027,936
------------- --------------- ---------------- ----------------
Net income $21,893,200 $7,133,266 $(5,646,572) $23,379,894
============= =============== ================ ================
Net income per share:
Primary $0.84 $0.88
Fully diluted $0.81 $0.84
Weighted average number of shares outstanding:
Primary 26,186,355 496,387 (d) 26,682,742
Fully diluted 30,728,710 496,387 (d) 31,225,097
</TABLE>
8
<PAGE>
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
For the Three Months Ended and Nine Months Ended April 30, 1997 and 1996
Operating revenue for the three months ended April 30, 1997 increased 50% to
$109,432,000 from $72,984,000 for the three months ended April 30, 1996.
Operating revenue increased 66% to $297,574,000 for the nine months ended April
30, 1997 from $179,566,000 for the nine months ended April 30, 1996. This
increase in operating revenue is attributable to acquisitions and expanded
product and service lines in existing areas of operation. The Company has
focused its acquisition and expansion efforts to develop the home respiratory
and other medical equipment line of business, yet employs a single sales force
to market all products and services offered by the Company.
Operating revenue for the home respiratory and other medical equipment grew to
$83,560,000 for the three months ended April 30, 1997 from $57,730,000 for the
three months ended April 30, 1996. This 45% increase was due mainly to increases
in patient bases throughout the Company's locations and increased marketing
efforts in certain locations. The majority of the Company's acquisitions made
during the nine months ended April 30, 1997 are primarily in this line of
business.
Operating revenue from home infusion therapy and other pharmacy-related products
and services increased 72% to $16,946,000 for the three months ended April 30,
1997 from $9,850,000 for the three months ended April 30, 1996. Growth in this
line of business should continue as the Company expands its referral bases and
available products and services.
Operating revenue from primary care physician services and other services
increased to $8,925,000 for the three months ended April 30, 1997 from
$5,404,000 for the three months ended April 30, 1996. Growth in this line of
business over the prior year is due to the Company's increased market
penetration, seasonal volume and managed care initiatives begun in the two
regional markets where it operates.
The pro forma condensed combined statements of income presented in Note G to the
interim financial statements depict the effect of the acquired entities on the
prior fiscal year's and current fiscal year's operations to date. Such financial
statements include the additional costs of the acquisitions, but do not include
the savings that the Company has planned in the process of the combination and
integration of operations into the existing Company.
Cost of revenue as a percentage of operating revenue was 24.2% for the three
months and 25.9% for the nine months ended April 30, 1997 compared to 27.8% for
the three months and 27.5% for the nine months ended April 30, 1996. The
addition of new entities coupled with changes in the product mix at existing
locations causes this relationship to change from quarter to quarter.
Consolidation of purchasing functions and purchasing power is an on-going task
as the Company continues to acquire businesses with varied needs, strengths and
product mixes. Selling, general and administrative expenses as a percentage of
operating revenue increased to 50.3% for the three months and 49.0% for the nine
months ended April 30, 1997 from 47.8% and 48.2% for the respective periods in
the prior year. Growth in the rental revenue from home respiratory and medical
equipment reduce the percentage of cost of sales, while growth in physician
related services reduces the percentage of cost of sales and increases the
percentage of selling, general and administrative expenses in relation to total
revenues.
9
<PAGE>
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Management's Discussion and Analysis of Financial Condition and Results of
Operations (continued)
Results of Operations
For the Three Months Ended and Nine Months Ended April 30, 1997 and 1996 -
continued
Income before interest, taxes, depreciation and amortization for the nine months
ended April 30, 1997 grew to 72% to $74,773,000 from $43,652,000 for the nine
months ended April 30, 1996. This 71% growth compared to the 49% growth in net
income primarily demonstrates the effect of the cost of capital employed in the
expansion of the Company and of purchase accounting. The Company has never done
a pooling of interests as a result of its acquisition activities.
Depreciation and amortization expense increased to $30,344,000 for the nine
months ended April 30, 1997 from $17,502,000 for the nine months ended April 30,
1996. This increase is attributable to the Company's purchase of intangible and
fixed assets resulting from various acquisitions along with the additional fixed
assets needed for the increased rentals of equipment as also demonstrated in the
increase in income before interest, taxes, depreciation and amortization.
The Company incurred net interest expense of $9,214,000 for the nine months
ended April 30, 1997 compared to net interest expense of $3,098,000 for the nine
months ended April 30, 1996. The interest expense resulted from the Company
borrowing monies to fund its acquisition program, which included total average
borrowings of $212,000,000 borrowed between August 1, 1996 and April 30, 1997 on
its syndicated bank line of credit and convertible subordinated debentures .
Income tax expense was provided at a 37.8% effective rate for the nine months
ended April 30, 1997, comparable to actual rates expected for the current fiscal
year and those experienced in prior periods.
As a result of the foregoing, net income increased 49% to $21,893,000 for the
nine months ended April 30, 1997 from $14,696,000 for the nine months ended
April 30, 1996.
Liquidity and Capital Resources
At April 30, 1997, total current assets were $149,479,000 and total current
liabilities were $186,674,000, resulting in negative working capital of
$37,195,000. The Company's current ratio was 0.80 to 1.00 at April 30, 1997
compared to 0.74 to 1.00 at April 30, 1996. The negative working capital is
attributable to the Company carrying the entire balance of notes payable to
banks of $ 162,014,000 as a current liability at April 30, 1997.
During the nine months ended April 30, 1997, the Company generated cash of
$35,013,000 from operating activities, primarily as a result of net income of
$21,893,000, depreciation and amortization of $30,344,000 and the timing of
purchases of and payments for operating items. As of April 30, 1997, the Company
had borrowed $162,014,000 on its line of credit to fund its acquisition program.
The Company's syndicated bank credit facility was expanded from $200,000,000 to
$300,000,000 on June 3, 1997, of which approximately $129,000,000 was available
at that time. The terms and covenants are similar to those in the previous loan
agreement. Management believes the Company's current credit capacity is
sufficient for the projected growth of the Company during the next twelve
months.
At April 30, 1997, net accounts receivable were $114,135,000 compared to
$74,291,000 at April 30, 1996. The Company's days revenue outstanding on net
accounts receivable were 94 days at April 30, 1997 compared to 92 days at April
30, 1996. Acquired receivables with no corresponding revenue account for
approximately 12 days revenue outstanding on net accounts receivable at April
30, 1997 and approximately 9 days at April 30, 1996.
10
<PAGE>
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Part II. Other Information
- -------- -----------------
<TABLE>
<S> <C>
Item 1. Legal proceedings
NOT APPLICABLE
Item 2. Changes in securities
NOT APPLICABLE
Item 3. Defaults upon senior securities
NOT APPLICABLE
Item 4. Submission of matters to a vote of security holders
NOT APPLICABLE
Item 5. Other information
NOT APPLICABLE
</TABLE>
11
<PAGE>
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Signature
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.
ROTECH MEDICAL CORPORATION
a Florida Corporation
Dated: June 16, 1997 By: /s/ Rebecca R. Irish
---------------- ---------------------------
Rebecca R. Irish, Treasurer
and Chief Financial Officer
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 3RD QUARTER
FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> JUL-31-1997 JUL-31-1997
<PERIOD-START> FEB-01-1997 AUG-01-1996
<PERIOD-END> APR-30-1997 APR-30-1997
<CASH> 0 8,738,227
<SECURITIES> 0 0
<RECEIVABLES> 0 116,878,279
<ALLOWANCES> 0 0
<INVENTORY> 0 20,151,931
<CURRENT-ASSETS> 0 149,478,551
<PP&E> 0 114,846,823
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 0 518,566,777
<CURRENT-LIABILITIES> 0 186,674,088
<BONDS> 0 110,000,000
0 3,322,175
0 0
<COMMON> 0 201,214,036
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 0 518,566,777
<SALES> 109,431,604 297,574,404
<TOTAL-REVENUES> 109,431,604 297,574,404
<CGS> 26,477,895 77,090,828
<TOTAL-COSTS> 26,477,895 77,090,828
<OTHER-EXPENSES> 66,059,191 176,054,644
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 3,649,048 9,214,066
<INCOME-PRETAX> 13,245,470 35,214,866
<INCOME-TAX> 4,979,163 13,321,666
<INCOME-CONTINUING> 8,266,307 21,893,200
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 8,266,307 21,893,200
<EPS-PRIMARY> $0.31 $0.84
<EPS-DILUTED> $0.30 $0.81
</TABLE>
