<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
=============
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission File Number 33-22011-A
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
---------------------------------------
(Exact name of Small Business Issuer as specified in its charter)
Florida 59-2858209
------------------------ -----------
(State of incorporation) (I.R.S. Employer Identification No.)
4900 North Habana Ave., Tampa, FL 33614
- ---------------------------------- -----
(Address of principal executive offices) (Zip Code)
Issuer's telephone number,
including area code: (813) 870-4230
---------------
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
--- ---
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Class Outstanding at September 30, 1996
Common stock, par value $1.00 per share 446 shares
- --------------------------------------- ----------
Documents incorporated by reference
NONE
1
<PAGE> 2
TABLE OF CONTENTS
FORM 10-QSB QUARTERLY REPORT - September 30, 1996
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3 - 9
--------------------
Item 2. Management's Discussion and Analysis or
---------------------------------------
Plan of Operation 10 - 12
-----------------
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13 - 15
-----------------
Item 2. Changes in Securities 16
---------------------
Item 3. Defaults Upon Senior Securities 16
-------------------------------
Item 4. Submission of Matters to a Vote of Security
-------------------------------------------
Holders 16
-------
Item 5. Other Information 16
-----------------
Item 6. Exhibits and Reports on Form 8-K 16
--------------------------------
Signatures 17
----------
</TABLE>
2
<PAGE> 3
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
Sept. 30, Dec. 31,
1996 1995
---------- ---------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 743,588 $ 643,988
Distributions receivable from investments 95,000 44,000
Prepaid expenses 9 8,038
---------- ----------
TOTAL CURRENT ASSETS 838,597 696,026
Equity investments 713,634 690,956
Other investments, noncurrent 20,000 20,000
---------- ----------
TOTAL ASSETS $1,572,231 $1,406,982
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued expenses $23,037 $18,625
Income taxes payable 21,598 22,156
---------- ----------
TOTAL CURRENT LIABILITIES 44,635 40,781
Deferred income taxes 35,518 35,518
Stockholders' equity:
Common stock, $1 par value, 7,500 shares
authorized, 438 shares issued and
outstanding at Sept. 30, 1996 and 422 shares
issued and outstanding at December 31, 1995 438 422
Common stock subscribed, 8 shares at Sept. 30,
1996 and 5 shares at December 31, 1995 8 5
Subscriptions receivable (13,600) (10,000)
Additional paid-in capital 746,562 685,477
Retained earnings 758,670 654,779
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 1,492,078 1,330,683
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,572,231 $1,406,982
========== ==========
</TABLE>
The accompanying notes
are an integral part of these financial statements.
3
<PAGE> 4
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For the nine For the nine For the three For the three
months ended months ended months ended months ended
Sept. 30, 1996 Sept. 30, 1995 Sept. 30, 1996 Sept. 30, 1995
-------------- -------------- -------------- --------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenue:
Equity in net earnings
of investees $117,678 $ 18,646 $26,739 $(1,379)
Distribution income 115,560 95,880 38,520 34,190
-------- -------- ------- -------
233,238 114,526 65,259 32,811
Expenses:
General and administrative 91,899 65,620 30,816 14,144
-------- -------- ------- -------
Operating income 141,339 48,906 34,443 18,667
Interest income 18,494 15,562 6,395 5,813
-------- -------- ------- -------
Income before income taxes 159,833 64,468 40,838 24,480
Income taxes (55,942) (9,670) (13,274) (3,672)
-------- -------- ------- -------
Net income $103,891 $ 54,798 $27,564 $20,808
======== ======== ======= =======
Net income per common share $ 240 $ 136 $ 62 $ 48
======== ======== ======= =======
Weighted average shares outstanding
and subscribed 433.6 403.6 447.2 431.2
======== ======== ======= =======
</TABLE>
The accompanying notes
are an integral part of these financial statements.
4
<PAGE> 5
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the nine For the nine
months ended months ended
Sept. 30, 1996 Sept. 30, 1995
-------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $103,891 $ 54,798
Adjustments to reconcile net income
to net cash used in operating activities:
Equity in net earnings of investees (117,678) (18,646)
Distribution income (115,560) (95,880)
Changes in operating assets and liabilities:
Prepaid expenses 8,029 8,063
Accrued expenses 4,412 (3,133)
Income taxes payable (558) (23,380)
-------- --------
Net cash used in operating activities (117,464) (78,178)
INVESTING ACTIVITIES
Distributions received 159,560 101,510
-------- --------
Net cash provided by investing activities 159,560 101,510
FINANCING ACTIVITIES
Proceeds from issuance of common stock 66,800 119,000
Redemptions of common stock (9,296) (11,771)
-------- --------
Net cash provided by financing activities 57,504 107,229
-------- --------
Increase in cash and cash equivalents 99,600 130,561
Cash and cash equivalents at beginning of period 643,988 473,781
-------- --------
Cash and cash equivalents at end of period $743,588 $604,342
======== ========
</TABLE>
The accompanying notes
are an integral part of these financial statements
5
<PAGE> 6
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
NOTES TO FINANCIAL STATEMENTS
The financial statements included herein have been prepared by St. Joseph's
Physician Associates, Inc. (the "Company"), without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. In the opinion
of management, the accompanying unaudited financial statements contain all
adjustments necessary to present fairly the financial position of the Company
as of September 30, 1996 and December 31, 1995, and the results of its
operations and its cash flows for the three months and nine months ended
September 30, 1996 and 1995.
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Organization
The Company was organized on November 20, 1987 as a Florida corporation. The
Company was organized to establish and operate an association of qualified
physicians for the purpose of engaging directly or indirectly in health care
related ventures.
In February 1989, the Company acquired 2,500 shares of the common stock of St.
Joseph's Physicians-Healthcenter Organization, Inc. (the "PHO") for $20 per
share. The 2,500 shares represent 50% of the outstanding common stock of the
PHO. The remaining 2,500 common shares of the PHO are owned by St. Joseph's
Enterprises, Inc., which also owns 100% of the PHO's 6,250 preferred shares.
The Company earns equity in the net earnings of the PHO at 22.22% of the PHO's
earnings after deducting a 6% cumulative dividend for the 6,250 preferred
shares. The PHO was organized for the purpose of engaging directly or
indirectly in health care related ventures.
In June 1989, the Company acquired 4,000 shares of the common stock in
Hospitals' Home Health Care of Hillsborough County, Inc. d/b/a St. Joseph's
Home Health Services ("HHC") for $10 per share. The 4,000 shares represent 50%
of the outstanding common stock of HHC. HHC was organized for the purpose of
providing medical services to patients in the home environment.
Equity Investments
The Company accounts for its investments in the PHO and HHC on the equity
method. Accordingly, these investments have been stated in the accompanying
balance sheets at the cost of acquisition plus the Company's equity in the
undistributed earnings/losses since acquisition, less distributions to the
Company. None of the assets or liabilities of the investments are included in
the balance sheets except to the extent of the Company's interests in the
6
<PAGE> 7
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (con't):
- ----------------------------------------------------------------------------
Equity Investments (con't)
- --------------------------
underlying net assets included in equity investments. The excess of the cost of
acquisition of the investment in HHC over the Company's interest in the
underlying net liabilities at the date of acquisition was $84,264 and is being
amortized as a component of equity in net earnings of investees over forty
years. As of September 30, 1996, the unamortized excess cost of acquisition of
the investment in HHC was $68,995. The Company's net earnings/losses resulting
from its proportionate share of the investees' revenues and expenses are
included in the statements of income.
Other Investments, Noncurrent
- -----------------------------
The Company owns five limited partnership units in St. Joseph's Same-Day
Surgery Center, Ltd. ("SDS"). The investment is accounted for at cost because
of the Company's limited percentage interest in the partnership and inability
to exercise significant influence over the partnership. Distributions are
recorded as income when declared and reported as distribution income.
Subscriptions Receivable
- ------------------------
Subscriptions receivable relate to agreements to purchase common stock of the
Company. Funds relating to such purchases will be paid in installments during
1996, 1997, and 1998.
Cash Equivalents
- ----------------
The Company considers all highly liquid investments with original maturities of
three months or less when purchased to be cash equivalents.
Income Per Common Share
- -----------------------
Income per common share is based on the weighted average number of common
shares outstanding during the period.
NOTE 2 - RELATED PARTIES:
- ------------------------
The members of the Board of Directors of the Company are also members of the
medical staff of St. Joseph's Hospital, Inc., which is owned by St. Joseph's
Health Care Center, Inc. St. Joseph's Health Care Center, Inc. has provided
administrative support to the Company at no charge. Additionally, all limited
partner investors in the PHO's ventures are investors in the Company. In
addition, all physicians who hold provider contracts with a subsidiary of the
PHO are investors in the Company.
7
<PAGE> 8
NOTE 2 - RELATED PARTIES (con't):
On October 1, 1991, the Company hired an executive director to provide and
facilitate the efficient operations of the Company. Prior to April 29, 1996,
the executive director was a member of the Company's Board of Directors. Under
the terms of a funding agreement dated October 1, 1991, the PHO agreed to
reimburse the Company for compensation paid to the executive director up to the
limits set forth in the Executive Director Agreement. The funding agreement was
terminated by the PHO effective January 1, 1996. Accordingly, the Company is
responsible for paying the compensation of the executive director without
reimbursement from the PHO. For the three months and nine months ended
September 30, 1996, $10,000 and $30,000, respectively, of compensation was paid
or accrued.
8
<PAGE> 9
NOTE 3 - EQUITY INVESTMENTS:
A summary of the changes in equity investments is presented below:
<TABLE>
<CAPTION>
HHC PHO Total
------- -------- -------
<S> <C> <C> <C>
Balance at December 31, 1995 $589,486 $101,470 $690,956
Equity in net earnings of investees 86,359 31,319 117,678
Dividend distribution declared but
not yet paid (95,000) 0 (95,000)
-------- -------- --------
Balance at September 30, 1996 $580,845 $132,789 $713,634
======== ======== ========
</TABLE>
The condensed balance sheets of the equity investees are as follows:
<TABLE>
<CAPTION>
Balance Sheets September 30, 1996 December 31, 1995
- -------------- ------------------------ ------------------------
HHC PHO HHC PHO
---------- -------- --------- --------
(unaudited)
<S> <C> <C> <C> <C>
Assets:
Currents assets $2,030,136 $519,942 $1,873,999 $337,592
Noncurrent assets 6,274 250,195 9,217 274,867
---------- -------- ---------- --------
Total assets $2,036,410 $770,137 $1,883,216 $612,459
========== ======== ========== ========
Liabilities and stockholders'
equity:
Current liabilities $654,001 $161,813 $676,697 $152,267
Long-term liabilities 168,697 0 168,697 0
Stockholders' equity 1,213,712 608,324 1,037,822 460,192
---------- -------- ---------- --------
Total liabilities and
stockholders' equity $2,036,410 $770,137 $1,883,216 $612,459
========== ======== ========== ========
</TABLE>
The condensed statements of income of the equity investees are as follows:
<TABLE>
<CAPTION>
For the Nine Months Ended For the Three Months Ended
------------------------- --------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1996 1995 1996 1995
--------- ----------- ------------ ----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Statements of Income - HHC
- --------------------------
Revenues $2,184,048 $1,295,330 $774,708 $396,997
Expenses 1,910,398 1,142,829 697,159 367,806
---------- ---------- -------- --------
273,650 152,501 77,549 29,191
Income tax provision 97,765 42,725 42,010 11,386
---------- ---------- -------- --------
Net income $ 175,885 $ 109,776 $ 35,539 $ 17,805
========== ========== ======== ========
Statements of Income - PHO
- --------------------------
Equity in partnership earnings $ 74,413 $ 80,893 $ 24,856 $ 26,627
Other revenues 258,858 31,287 84,254 8,966
Expenses 118,010 256,139 39,644 75,633
---------- ---------- -------- --------
215,261 (143,959) 69,466 (40,040)
Income tax provision 68,687 262 24,859 0
---------- ---------- -------- --------
Net income(loss) $ 146,574 $ (144,221) $ 44,607 ($40,040)
========== ========== ========
</TABLE>
9
<PAGE> 10
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
PART I - FINANCIAL INFORMATION
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
September 30, 1996
Liquidity
Cash resources of the Company increased by $99,600 during the first nine months
of 1996 and $130,561 during the same time period in 1995. Cash resources
resulted from the quarterly distributions received with respect to the five
limited partnership units in St. Joseph's Same-Day Surgery Center, Ltd. ("SDS")
and proceeds from the sale of additional common stock, offset by expenditures
for operating expenses and estimated tax payments. A smaller increase in cash
resources was realized in 1996 compared to 1995 because of the termination of
the PHO agreement to reimburse the compensation paid to the Executive Director
of the Company effective January 1, 1996 (See Note 2 to the Financial
Statements) and the payment during 1996 of the Executive Director compensation
without reimbursement from the PHO.
On May 26, 1995, St. Joseph's Health Network, Inc. ("SJHN"), a 100%-owned
subsidiary of the St. Joseph's Physicians-Healthcenter Organization, Inc. (the
"PHO"), was incorporated. SJHN, a physician-hospital organization, will
negotiate at-risk products with managed care organizations on behalf of its
member providers to provide high quality, competitively priced health care
services for persons residing or employed in the Tampa area. In the near
future, the Company might find it appropriate to assist the PHO with providing
additional capitalization for SJHN. The amount of funding, if any, has not
been determined at this time. However, the Company's contribution to such
funding would be determined by taking into account the Company's available
liquidity and its other anticipated cash needs. Additional liquidity for SJHN
is expected to be received from other sources, including possibly from provider
credentialing fees, additional equity contributions from the PHO and/or other
sources, and/or borrowings.
During the second quarter of 1996, the Board of Directors of Hospitals' Home
Health Care of Hillsborough County, Inc. ("HHC") declared a dividend in the
amount $95,000 to be paid to the Company before the end of 1996. On September
30, 1996, a $38,520 distribution with respect to the five SDS limited
partnership units was declared and received. In addition, proceeds of $37,200
from the sale of additional SJPA common stock were received during the third
quarter of 1996.
Management believes that current cash reserves, additional distributions with
respect to the five SDS limited partnership units, the distribution from HHC,
and the proceeds from sales of its common stock will provide adequate
short-term funding of the Company's on-going operations. However, because of
the PHO's decision to no longer fund the Executive Director's compensation and
10
<PAGE> 11
the Company's decision to use its other cash flows to keep the employment
arrangement with the Executive Director in force and effect, it is possible
that the Company will not be in a position to fund new projects that could
arise in the future.
Capital Resources
From time to time, the Company may find it appropriate to pursue additional
private offerings of its common stock. On September 30, 1996, the Company
completed a private offering in which subscriptions for 22 shares of common
stock at $3,200 per share were received. Although there can be no assurance,
the Company does not anticipate substantial difficulty in raising additional
funds, should the need arise.
Results of Operations
Equity in net earnings of investees is the result of the Company's investment
in the PHO and HHC. As a result of an increase in the profitability of the PHO
and HHC, the equity in net earnings has increased during the third quarter and
the first nine months of 1996, as compared to the same time period in 1995.
The increase in the profitability of the PHO is a result of a decrease in the
significant expenditures for the evaluation and implementation of new ventures
and the recognition of provider member fees associated with SJHN. The
increased profitability of HHC is the result of a significant increase in
intravenous ("I.V.") therapy revenue in 1996, as compared to 1995.
The Company owns five SDS limited partnership units and receives quarterly
distributions on such units. Distribution income for the third quarter and the
first nine months of 1996 was higher than the same period in 1995. The
distribution was calculated by taking into account anticipated operating cash
needs of SDS with the intent of maintaining appropriate reserves.
Interest earnings represent interest on bank deposits. The increase between
1996 and 1995 is due to increased cash balances and an increase in interest
rates.
General and administrative expenses increased during the third quarter and
first nine months of 1996 as compared to the same time periods of 1995.
Expenditures incurred in the third quarter and first nine months of 1995 for
consulting services relating to the evaluation of new ventures and for legal
expenses for legislative activities have not been incurred in 1996. However,
additional expenditures have been made relating to consulting and legal fees
for assistance with long range planning, revision of the Right of First Refusal
document, preparation of documents relating to the distribution of escrowed
funds from the St. Joseph's Diagnostic Center, Ltd. divestiture, and the
unreimbursed compensation of the Executive Director (prior to January 1, 1996,
the Executive Director compensation had been reimbursed by the PHO).
11
<PAGE> 12
It is anticipated that over the near term, general and administrative expenses
will continue to be incurred at comparable or slightly higher levels.
During the third quarter of 1996, the Company had net income of $27,564.
Therefore, the net income per common share was $62 for the third quarter of
1996. The net income per common share for the third quarter of 1995 was $48
per share. The increase in the net income per common share for the third
quarter of 1996 was due to an increase in net income offset slightly by a
greater number of shares outstanding.
Several new laws and regulations affecting the healthcare business were adopted
at both the state and federal levels during 1992, 1993, 1994 and 1995.
Healthcare reform legislation was passed by the Florida Legislature during its
Session that ended on May 4, 1996, and the United States Congress passed
healthcare reform legislation during the third quarter of 1996. Additional
healthcare reform is expected to be considered in 1997 at the state and federal
levels. Some of the legislation and regulation could have a significant
adverse impact on the Company, its related investments, and the stockholders of
the Company. The Company is continuing to monitor and evaluate the impact of
such changes in the laws and regulations.
12
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ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Limiting Fee Schedule Litigation
On July 10, 1992, the Company joined several other entities in filing a lawsuit
in state court against the State of Florida seeking a declaratory judgment on
the constitutionality of the limiting fee schedule on entities that provide
specified "designated health services" that was included in the Patient
Self-Referral Act of 1992 and requesting that an injunction be granted to stop
the enforcement of the limiting fee schedule. The fee limits originally were
scheduled to take effect on July 1, 1992, but enforcement was temporarily
restrained by an order of the United States District Court for the Northern
District of Florida in a separate lawsuit filed by unrelated parties (the
"Federal Case"). The state court action was filed as a protective measure, in
case the federal court in the Federal Case (which agreed to hear the case and
rule quickly) upheld the constitutionality of the fee limits. The state court
action was one of several (the others being filed by unrelated parties) that
were filed in the Circuit Court of the Second Judicial Circuit, Leon County,
Florida, all of which cases were consolidated under the name Physical Therapy
Rehabilitation Center of Coral Springs, Inc. v. State of Florida (the "State
Case"). Shortly after the lawsuit in which the Company is a party was filed,
the United States District Court for the Northern District of Florida, in the
Federal Case, struck down the fee limits as an unconstitutional violation of
the Equal Protection Clause of the United States Constitution, and entered an
injunction against enforcement. The state court hearing the State Case then
entered a temporary injunction against enforcement, based upon the injunction
entered in the Federal Case.
The injunction entered in the Federal Case was appealed to the United States
Eleventh Circuit Court of Appeals, and, on February 15, 1994, the Eleventh
Circuit Court of Appeals reversed the trial court, upholding that the fee
limits do not violate the Equal Protection Clause of the United States
Constitution. A motion for reconsideration was filed with the Eleventh Circuit
Court of Appeals, and that motion was denied in April 1994. Subsequently, a
petition of certiorari was filed with the United States Supreme Court, but the
Supreme Court subsequently denied certiorari. As a result, the decision of the
Eleventh Circuit Court of Appeals on the constitutionality of the fee limits
under the Equal Protection Clause of the United States Constitution stands.
In the meantime, as a result of the Eleventh Circuit Court of Appeals' reversal
of the federal trial court, the Florida Agency For Health Care Administration
("AHCA") decided to actively pursue the State Case. AHCA went back to the
state trial court and argued that (1) there is no independent
13
<PAGE> 14
basis for the state temporary injunction and (2) in any event, the state
temporary injunction should not be entered unless every party who would be
protected by the injunction files a bond with the state trial court. On June
23, 1994, the trial court ruled that its temporary injunction would stay in
place, but anyone wanting the protection of the injunction would need to post a
$1,000 bond. AHCA was not pleased with these decisions, and it filed an appeal
with the Florida First District Court of Appeals on July 18, 1994.
The state trial court continued to review various motions that were filed by
the plaintiffs, and, on July 7, 1994, the state trial court declared the
limiting fee schedule unconstitutional, under the Florida Constitution, for
providers of the "designated health services" specified in the Patient
Self-Referral Act of 1992 (other than providers of radiation therapy services).
AHCA filed an appeal of this decision with the Florida First District Court of
Appeals on August 8, 1994. The Florida First District Court of Appeals has
ruled that, because the state trial court's original June 23, 1994 order was
already subject to appeal, the trial court did not have jurisdiction to enter
its July 7, 1994 ruling on unconstitutionality. As a result, all that remained
for review by the Florida First District Court of Appeals was the state trial
court's June 23, 1994 ruling.
In the meantime, on February 13, 1995, in a case known as Kagan v. State of
Florida, the Circuit Court of the Second Judicial Circuit, Leon County,
Florida, again ruled that the limiting fee schedule is unconstitutional, under
the Florida Constitution, for providers of diagnostic imaging services. This
case was appealed by AHCA to the Florida First District Court of Appeals on
March 9, 1995.
Oral argument in the State Case originally was scheduled before the Florida
First District Court of Appeals on June 29, 1995. However, the Court canceled
the oral argument and, instead, scheduled an attorneys' conference to determine
how best to resolve the multiple appeals relating to the State Case and the
Kagan decision. As a result of the attorneys' conference, the First District
Court of Appeals entered a new order that (1) allowed the state trial court to
enter a new order in the State Case (replacing the original July 7, 1994
decision) declaring the limiting fee schedule unconstitutional under the
Florida Constitution, and (2) consolidated all of the appeals into one case.
Under the new order of the First District Court of Appeals, the issues in the
appeal were framed as (1) whether the limiting fee schedule is unconstitutional
under the Florida Constitution, (2) whether the limiting fee schedule is an
unlawful delegation of legislative authority, and (3) if the limiting fee
schedule is deemed constitutional and not an unlawful delegation of legislative
authority, then whether the state trial court's June 23, 1994 ruling should be
modified or dissolved. In an opinion filed on January 4, 1996, the First
District Court of Appeals ruled that the limiting fee schedule is
unconstitutional under the Florida Constitution and should be stricken from the
Patient Self-Referral Act of 1992. AHCA has filed an appeal of this decision
with the Florida Supreme Court, its brief having
14
<PAGE> 15
been filed on March 25, 1996. All parties have now filed their responsive
briefs. No date has been set for oral argument, and the Florida Supreme Court
has the discretion to rule on the appeal without oral argument.
Two bills that were passed by the Florida Legislature during its Session that
ended on May 4, 1996, included provisions that repeal the limiting fee schedule
retroactive to the original date on which it was to become effective (July 1,
1992). One of the bills also prohibits any governmental agency from imposing
or collecting an administrative fine from a provider for failure to comply with
the limiting fee schedule. Both bills became law in May 1996 when the Governor
did not veto them.
Notice of these two bills was filed with the Florida Supreme Court, and the
Supreme Court issued an order dismissing the State Case. As a result, all
litigation relating to the limiting fee schedule is now ended.
15
<PAGE> 16
ITEM 2. CHANGES 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
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
27 - Financial Data Schedule (for SEC use only)
b. Reports on Form 8-K
None
16
<PAGE> 17
SIGNATURES
November 13, 1996
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ST. JOSEPH'S PHYSICIAN ASSOCIATES, INC.
---------------------------------------
(Registrant)
Date: November 13, 1996 /s/ Norman Castellano, M.D.
---------------------------------------
Norman Castellano, M.D., President
St. Joseph's Physician Associates, Inc.
Date: November 13, 1996 /s/ Andrew G. Boyer, M.D.
---------------------------------------
Andrew G. Boyer, M.D., Treasurer and
Principal Financial Officer
St. Joseph's Physician Associates, Inc.
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ST. JOSEPH'S
PHYSICIAN ASSOCIATES, INC. SEPTEMBER 30, 1996 BALANCE SHEET AND INCOME STATEMENT
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED
SEPTEMBER 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 743,588
<SECURITIES> 0
<RECEIVABLES> 95,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 838,597
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,572,231
<CURRENT-LIABILITIES> 44,635
<BONDS> 0
733,408
0
<COMMON> 0
<OTHER-SE> 758,670
<TOTAL-LIABILITY-AND-EQUITY> 1,572,231
<SALES> 0
<TOTAL-REVENUES> 251,732
<CGS> 0
<TOTAL-COSTS> 91,899
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 159,833
<INCOME-TAX> 55,942
<INCOME-CONTINUING> 103,891
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 103,891
<EPS-PRIMARY> 240.00
<EPS-DILUTED> 0
</TABLE>
