FILED PURSUANT TO RULE 424(b)(1)
REGISTRATION NO. 333-25921
PROSPECTUS
OF
HEALTHSOUTH CORPORATION
THIS PROSPECTUS RELATES TO 223,000 SHARES (THE "SHARES") OF THE COMMON STOCK,
PAR VALUE $.01 PER SHARE (THE "HEALTHSOUTH COMMON STOCK"), OF HEALTHSOUTH
CORPORATION (TOGETHER WITH ITS SUBSIDIARIES, "HEALTHSOUTH" OR THE "COMPANY")
BEING OFFERED BY THE SELLING STOCKHOLDER IDENTIFIED HEREIN (THE "SELLING
STOCKHOLDER"). THE SELLING STOCKHOLDER ACQUIRED THE SHARES OF HEALTHSOUTH COMMON
STOCK IN CONNECTION WITH THE ACQUISITION BY HEALTHSOUTH OF HEALTH IMAGES, INC. A
DELAWARE CORPORATION ("HEALTH IMAGES"), ON MARCH 3, 1997. SEE "SELLING
STOCKHOLDER".
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All proceeds from any sales of the Shares by the Selling Stockholder will
inure to the benefit of the Selling Stockholder. The Company will receive none
of the proceeds from the sale of Shares which may be offered hereby. All
expenses of registration incurred in connection herewith, including fees and
expenses of counsel to the Selling Stockholder, are being borne by the Company,
and all selling and other expenses incurred by the Selling Stockholder will be
borne by the Selling Stockholder.
The Selling Stockholder has not advised the Company of any specific plans for
the distribution of the Shares covered by this Prospectus, but it is anticipated
that the Shares will be sold from time to time primarily in transactions (which
may include block transactions) on the New York Stock Exchange at the market
price then prevailing, although sales may also be made in negotiated
transactions or otherwise. The Selling Stockholder and the brokers and dealers
through whom sale of the Shares may be made may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933, as amended, and their
commissions or discounts and other compensation may be regarded as underwriters'
compensation. See "Plan of Distribution".
THE SECURITIES TO BE ISSUED HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION (THE "SEC") OR BY ANY STATE
SECURITIES COMMISSION NOR HAS THE SEC OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS MAY 7, 1997.
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AVAILABLE INFORMATION
HEALTHSOUTH has filed a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), with the SEC covering
the Shares (including exhibits and amendments thereto, the "Registration
Statement"). As permitted by the rules and regulations of the SEC, this
Prospectus omits certain information contained in the Registration Statement.
For further information pertaining to the securities offered hereby, reference
is made to the Registration Statement.
HEALTHSOUTH is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports, proxy statements and other information with
the SEC relating to its business, financial statements and other matters. The
Registration Statement, as well as such reports, proxy statements and other
information, may be inspected at the public reference facilities maintained by
the SEC at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549 and should be available for inspection and copying at the regional offices
of the SEC located at Seven World Trade Center, Suite 1300, New York, New York
10048; 5670 Wilshire Boulevard, 11th Floor, Los Angeles, California 90036-3648;
and Citicorp Center, 500 West Madison Street, Room 1400, Chicago, Illinois
60661-2511. Copies of such material can be obtained at prescribed rates by
writing to the SEC, Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The SEC also maintains a web site that contains reports,
proxy and information statements and other information regarding HEALTHSOUTH and
the Registration Statement. The address of that web site is http://www.sec.gov.
The HEALTHSOUTH Common Stock is listed on the New York Stock Exchange, and the
Registration Statement, reports, proxy statements and certain other information
filed by HEALTHSOUTH should be available for inspection at the library of the
New York Stock Exchange, Inc., 20 Broad Street, 7th Floor, New York, New York
10005.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. COPIES OF SUCH REPORTS, PROXY STATEMENTS AND OTHER
INFORMATION FILED BY HEALTHSOUTH, OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS
SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED HEREIN BY REFERENCE, ARE AVAILABLE
WITHOUT CHARGE, UPON WRITTEN OR ORAL REQUEST, FROM THE SECRETARY OF HEALTHSOUTH
CORPORATION, ONE HEALTHSOUTH PARKWAY, BIRMINGHAM, ALABAMA 35243, TELEPHONE (205)
967-7116.
There are hereby incorporated by reference in this Prospectus, and
specifically made a part hereof, the following documents heretofore filed by
HEALTHSOUTH with the SEC, pursuant to the Exchange Act:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996.
2. The Company's Current Report on Form 8-K filed February 19, 1997
(relating to the acquisition of Horizon/CMS Healthcare Corporation).
3. The Company's Current Report on Form 8-K filed March 13, 1997 (reporting
the consummation of the acquisition of Health Images, Inc.).
4. The description of the Company's capital stock contained in the
Company's Registration Statement on Form 8-A filed August 26, 1989.
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All documents filed by HEALTHSOUTH pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of any offering hereunder shall be deemed to be incorporated by
reference into this Prospectus and to be made a part hereof from the date of the
filing of such documents. Any statement contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for the purpose
hereof to the extent that a statement contained herein (or in any other
subsequently filed document which also is incorporated by reference herein)
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed to constitute a part hereof, except as so modified or
superseded.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF THE SECURITIES TO WHICH THIS
PROSPECTUS RELATES SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE INFORMATION CONCERNING HEALTHSOUTH CONTAINED IN
THIS PROSPECTUS SINCE THE DATE OF SUCH INFORMATION.
The principal executive offices of HEALTHSOUTH are located at One HealthSouth
Parkway, Birmingham, Alabama 35243 and its telephone number is (205) 967-7116.
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RISK FACTORS
In addition to the other information in this Prospectus, the following should
be considered carefully by potential purchasers of the Shares.
Regulation. As a result of the continued escalation of healthcare costs and
the inability of many individuals to obtain health insurance, numerous proposals
have been or may be introduced in the United States Congress and state
legislatures relating to healthcare reform. There can be no assurance as to the
ultimate content, timing or effect of any healthcare reform legislation, nor is
it possible at this time to estimate the impact of potential legislation, which
may be material, on HEALTHSOUTH. HEALTHSOUTH is also subject to various other
types of regulation at the federal and state levels, including, but not limited
to, licensure and certification laws, Certificate of Need laws and laws relating
to financial relationships among providers of healthcare services, Medicare
fraud and abuse and physician self-referral.
THE COMPANY
HEALTHSOUTH Corporation ("HEALTHSOUTH" or the "Company") is the nation's
largest provider of outpatient and rehabilitative healthcare services. The
Company provides these services through its national network of outpatient and
inpatient rehabilitation facilities, outpatient surgery centers, diagnostic
centers, occupational medicine centers, medical centers and other healthcare
facilities. The Company believes that it provides patients, physicians and
payors with high-quality healthcare services at significantly lower costs than
traditional inpatient hospitals. Additionally, the Company's national network,
reputation for quality and focus on outcomes has enabled it to secure contracts
with national and regional managed care payors. At December 31, 1996, the
Company had over 1,000 patient care locations in 50 states.
In its outpatient and inpatient rehabilitation facilities, the Company
provides interdisciplinary programs for the rehabilitation of patients
experiencing disability due to a wide variety of physical conditions, such as
stroke, head injury, orthopaedic problems, neuromuscular disease and
sports-related injuries. The Company's rehabilitation services include physical
therapy, sports medicine, work hardening, neurorehabilitation, occupational
therapy, respiratory therapy, speech language pathology and rehabilitation
nursing. Independent studies have shown that rehabilitation services like those
provided by the Company can save money for payors and employers.
In addition to its rehabilitation facilities, the Company operates one of the
largest networks of free-standing outpatient surgery centers in the United
States. The Company's outpatient surgery centers provide the facilities and
medical support staff necessary for physicians to perform non-emergency surgical
procedures. While outpatient surgery is widely recognized as generally less
expensive than surgery performed in a hospital, the Company believes that
outpatient surgery performed at a free-standing outpatient surgery center is
generally less expensive than hospital-based outpatient surgery. Approximately
80% of the Company's surgery center facilities are located in markets served by
its rehabilitative service facilities, enabling the Company to pursue
opportunities for cross-referrals.
Over the last two years, the Company has completed several significant
acquisitions in the rehabilitation business and has expanded into the surgery
center, diagnostic and occupational medicine businesses. The Company believes
that these acquisitions complement its historical operations and enhance its
market position. The Company further believes that its expansion into the
outpatient surgery, diagnostic and occupational medicine businesses provides it
with platforms for future growth. The Company is continually evaluating
potential acquisitions in the outpatient and rehabilitative healthcare services
industry.
USE OF PROCEEDS
All proceeds from any sales of the Shares by the Selling Stockholder will
inure to the benefit of the Selling Stockholder. The Company will receive none
of the proceeds from the sale of Shares offered hereby.
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SELLING STOCKHOLDER
The Shares of HEALTHSOUTH Common Stock were acquired by Robert D. Carl, III,
the Selling Stockholder, pursuant to the exercise of a warrant issued by Health
Images, Inc. ("Health Images"), which was assumed by HEALTHSOUTH in a merger
transaction (the "Merger") on March 3, 1997, in which a wholly owned subsidiary
of HEALTHSOUTH was merged with and into Health Images. The Selling Stockholder
was previously the Chairman, President and Chief Executive Officer of Health
Images. The Selling Stockholder is acting as principal for his own account and
has registered for resale the entire amount of HEALTHSOUTH Common Stock obtained
by him through the exercise of such warrant, although he retains discretion to
sell less than such entire amount.
The Selling Stockholder is not an executive officer or director of the
HEALTHSOUTH. The total number of Shares available for sale hereunder is less
than .001% of the total outstanding Common Stock of the Company at May 7, 1997.
PLAN OF DISTRIBUTION
The Shares of HEALTHSOUTH Common Stock may be offered and sold by or for the
account of the Selling Stockholder from time to time as market conditions permit
on The New York Stock Exchange, or otherwise, at prices and on terms then
prevailing or in negotiated transactions. Some or all of the Shares may be sold
by one or more of the following methods, without limitation: (a) a block trade
in which a broker or dealer so engaged will attempt to sell the shares as agent,
but may position and resell a portion of the block as principal to facilitate
the transaction; (b) purchases by a broker or dealer (including a market maker)
as principal and resale by such broker or dealer for its account pursuant to
this Prospectus; (c) ordinary brokerage transactions and transactions in which
the broker solicits purchasers; and (d) face-to-face transactions between
sellers and purchasers without a broker-dealer. In effecting sales, brokers or
dealers engaged by the Selling Stockholder may arrange for other brokers or
dealers to participate. Such brokers or dealers may receive commissions or
discounts from the Selling Stockholder in amounts to be negotiated. Such brokers
and dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act, in connection with such
sales.
Upon the Selling Stockholder's notifying the Company that any material
arrangement has been entered into with a broker-dealer for the sale of Shares
through a cross or block trade, a supplemental prospectus will be filed under
Rule 424(c) under the Securities Act, setting forth the name of the
participating broker-dealer(s), the number of Shares involved, the price at
which such Shares were sold by the Selling Stockholder, the commissions paid or
discounts or concessions allowed by the Selling Stockholder to such
broker-dealer(s), and where applicable, that such broker-dealer(s) did not
conduct any investigation to verify the information set out in the Prospectus.
EXPERTS
The consolidated financial statements and schedule of HEALTHSOUTH at December
31, 1996 and 1995, and for each of the three years in the period ended December
31, 1996, appearing in HEALTHSOUTH's Annual Report (Form 10-K) for the year
ended December 31, 1996, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon incorporated herein by reference.
Such consolidated financial statements and schedule are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
LEGAL MATTERS
The validity of the shares of HEALTHSOUTH Common Stock issued to the Selling
Stockholder has been passed upon by Haskell Slaughter & Young, L.L.C.
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