SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of Report (Date of earliest event reported) February 27, 1996.
HEALTH MANAGEMENT, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-18472 75-2096632
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation or
organization)
4250 Veterans Memorial Hwy, Ste 400 W., Holbrook, NY 11741
(Address of principal executive offices) (Zip Code)
(516) 981-0034
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report.)
Item 5. Other Events.
On February 27, 1996 the Registrant issued a press release, a copy of which
is attached as Exhibit 1 to this Form 8-K and is incorporated herein by
reference. The press release announced, among other things, the resignation of
Dr. Clifford E. Hotte as Chairman of the Board, Chief Executive Officer and
President of the Registrant, the assumption by Dr. Hotte of the position of Vice
Chairman -- Business Development as well as the resignation of Drew Bergman, the
Chief Development Officer of the Registrant and the former Chief Financial
Officer of the Registrant.
A committee of the outside directors consisting of Andre C. Dimitriadis, C.
Mark Weinberg and Dr. Timothy Triche, has formed an office of the Chief
Executive Officer until a suitable successor is selected.
The Registrant also announced that it discovered certain accounting
irregularities and that it believes it may have to restate its financial
statements for the fourth quarter of the fiscal year ended April 30, 1995 and
for the subsequent two fiscal quarters ended July 31, 1995 and October 31, 1995.
These irregularities were discovered in the course of an inquiry of the Special
Committee of the Company's Board of Directors.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit Number Description
99.1 Press release dated February 27, 1996 issued by the
Registrant.
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.
HEALTH MANAGEMENT, INC.
(Registrant)
Date: March 13, 1996
/s/ James Mieszala
Name: James Mieszala
Its: Acting President
Index to Exhibits
Exhibit Sequential
Number Description Page No.
99.1 Press release dated February 27, 1996 6
issued by the Registrant.
FOR IMMEDIATE RELEASE EXHIBIT 99.1
HEALTH MANAGEMENT, INC. EXPECTS PRE-TAX CHARGE BETWEEN
$15-$20 MILLION FOR FISCAL THIRD QUARTER ENDED JANUARY 31
Holbrook, NY ... February 27, 1996 ... Health Management, Inc. ("HMI") (NNM:
HMIS) announced today that while the Company's financial results for the third
quarter ended January 31, 1996 have not yet been finalized, the Company intends
to take significant write-offs for accounts receivable and inventory, as well as
planned operational consolidations. The Company estimates that the total
charges shall be in the range of $15 to $20 million.
The Company further announced that it has discovered certain accounting
irregularities and that it believes it may have to restate its financial
statements for the fourth quarter of the fiscal year ended April 30, 1995 and
for the subsequent two fiscal quarters ended July 31, 1995 and October 31, 1995.
These irregularities were discovered in the course of an inquiry of the Special
Committee of the Company's Board of Directors. The extent of the adjustments to
past financials is still unknown. Based on the preliminary results of the
Special Committee's review, which has not yet been completed, the Company
believes that these matters were limited to periods stated above and may not
have had an impact on prior fiscal periods. In addition, the Company expects
that it will be in default under its loan agreements.
HMI accepted the resignation of Dr. Clifford E. Hotte as Chairman of the
Board, Chief Executive Officer and President of the Company. Dr. Hotte will
assume the office of Vice-Chairman - Business Development. Directors of the
Corporation have formed a committee of three outside Board members, consisting
of Andre C. Dimitriadis, D. Mark Weinberg and Dr. Timothy Triche, to assume the
office of the CEO until a suitable successor is selected.
Mr. Dimitriadis, who will chair the Committee, is the Chairman and CEO of
LTC Properties, Inc., a New York Stock Exchange-listed REIT that invests in
long-term care and other health care related facilities and was instrumental in
the turnaround of Beverly Enterprises. D. Mark Weinberg is a director and the
Executive Vice President for WellPoint Health Networks, Inc., in charge of its
national and specialty businesses. WellPoint is the second largest publicly
traded managed care company in the U.S. Dr. Timothy Triche is the Chairman and
CEO of OncorMed, Inc., a publicly held medical services company, and the
chairman of the Department of Pathology & Laboratory Medicine at Children's
Hospital in Los Angeles.
In addition, the Company has announced the resignation of Drew Bergman, the
Chief Development Officer and the former Chief Financial Officer of HMI.
The day-to-day operations of the Company will continue to be run by James
Mieszala, the President of HMI's wholly-owned subsidiary, HMI Pharmaceutical
Services, who will now be the acting President of the Company, and by Paul
Jurewicz, the Corporation's new Chief Financial Officer.
Messrs. Hotte, Mieszala and Jurewicz will each report to the office of the
CEO.
Paul Jurewicz stated, "The Company will be revising its accounting systems
and procedures and is intending to take significant write-offs. These write-
offs include those for accounts receivable and inventory as well as planned
operational consolidations necessary to restore profitability. The total
charges shall be in the range of $15 million to $20 million pre-tax, and we
expect a loss for the third quarter."
Mr. Dimitriadis said, "We believe that with the actions undertaken today
and the focused efforts on cost reduction, HMI can be restored to
profitability."
Health Management, Inc., is a national provider of integrated health
management services to patients with chronic medical conditions and to health
care professionals, drug manufacturers and third-party payers involved in their
care.
# # #
Contacts:
Diane Perry, Joseph Kist or Ruth Markowitz Mark Danes
(Analysts) (Media)
Edelman Financial Edelman Financial
212-704-8293/212-704-8239/212-704-4451 212-704-4464
