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): August 24, 1999
MEDICAL MANAGER CORPORATION
(Exact name of registrant as specified in charter)
DELAWARE 0-17822 22-2975182
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
669 River Drive, River Drive Center II 07407
Elmwood Park, NJ (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (201) 703-3400
Exhibit Index Appears on page 2.
<PAGE>
2
Item 5. Other Events.
Medical Manager Corporation issued on August 24, 1999 the
press release attached hereto as Exhibit 99.1. Such press release is
incorporated herein by reference.
Exhibit Index
Exhibit No. Description
- ----------- -----------
99.1 Press Release, dated August 24, 1999
<PAGE>
3
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 hereunto duly authorized.
MEDICAL MANAGER CORPORATION
Date: August 24, 1999 By: /s/ James R. Love
-----------------------------------
Name: James R. Love
Executive Vice President --
Financial and Administration
and Chief Financial Officer
FOR IMMEDIATE RELEASE
Contact: James R. Love
Executive Vice President - Chief Financial Officer
(201) 703-3400
MEDICAL MANAGER AND CAREINSITE IN DISCUSSIONS WITH STRATEGIC PARTNERS
MEDICAL MANAGER ANNOUNCES FOURTH QUARTER AND YEAR-END RESULTS
RECENTLY ACQUIRED MEDICAL MANAGER HEALTH SYSTEMS SUBSIDIARY TO RESTATE SIX
MONTH RESULTS
ELMWOOD PARK, NJ, August 24, 1999--Medical Manager Corporation (NASDAQ:
MMGR), formerly Synetic, Inc., announced today financial results for the quarter
and year ended June 30, 1999, exclusive of results for its recently acquired
subsidiary Medical Manager Health Systems, Inc. (formerly Medical Manager
Corporation or "MMHS"). As previously announced, Synetic, Inc. and Medical
Manager Corporation completed a merger, accounted for as a pooling of interests
transaction, effective July 23, 1999 and the name of Synetic was changed to
Medical Manager Corporation. As required by accounting rules, combined results
reflecting the merger will be presented after the issuance of post-combination
results for the quarter ended September 30, 1999. Effective today, Medical
Manager will trade under the symbol "MMGR".
The Company now operates three lines of business: physician practice
management information systems through its recently acquired subsidiary Medical
Manager Health Systems; healthcare electronic commerce through its 72% owned
subsidiary CareInsite, Inc. (NASDAQ:CARI); and plastics and filtration
technologies through Porex Corporation.
The Company's net sales for the three months ended June 30, 1999,
excluding the MMHS subsidiary, were $31,434,000, as compared to $18,235,000 in
the prior year, an increase of 72%. Excluding an after-tax charge of $958,000 or
$0.04 per share relating to litigation expenses, net income for the quarter was
$1,092,000 or $0.04 per share, as compared to $2,883,000 or $0.14 per share in
the prior year. Net sales for the year ended June 30, 1999, excluding the MMHS
subsidiary, were $100,164,000, as compared to $64,945,000 in the prior year, an
increase of 54%. Excluding the effect of after-tax charges of $2,586,000 or
$0.12 per share relating to litigation expenses and $1,524,000 or $0.07 per
share related to a previously announced one-time write-off of capitalized
software costs resulting from the transaction with Cerner Corporation which was
completed in January 1999, net income for the year was $6,497,000 or $0.30 per
share, as compared to $9,044,000 or $0.46 per share in the prior year. The
decrease in net income and earnings per share reflects the increased investment
in the development of CareInsite's business. These results do not include any
merger-related expenses related to the acquisition of the Company's MMHS
subsidiary, which the Company expects to recognize in the first quarter of
fiscal year 2000.
The Company announced that it will restate the previously reported
pre-acquisition results of MMHS for the three months ended March 31, 1999
(unaudited) and three months ended June 30, 1999 (unaudited). The
<PAGE>
Company determined that the accounting treatment previously accorded to five
transactions involving the bulk sale of software licenses entered into
concurrently with business combinations and other related transactions should be
restated to reflect the software license revenue as a reduction of the
acquisition price of the related transactions. These transactions represented
$5,532,000 of revenue and $3,502,000 of net income for the six months ended June
30, 1999, of which $2,766,000 of revenue and $1,706,000 of net income are
attributable to the three months ended March 31, 1999 and $2,766,000 of revenue
and $1,796,000 of net income are attributable to the three months ended June 30,
1999. The Company also noted that it completed a review for significant similar
sales transactions for the years ended December 31, 1998 and 1997 and concluded
that no adjustments to these periods were necessary. The Company reviewed its
conclusions with MMHS's independent public accountants, PricewaterhouseCoopers
LLP, in connection with the audit of the MMHS financial statements for each of
the fiscal years ended June 30, 1999 and 1998. Commenting on the restatement,
Martin J. Wygod, Chairman of Medical Manager Corporation, said, "Since first
being advised of this accounting issue late Friday by the senior management of
the acquired business, we have spent the last three days reviewing the situation
with both MMHS senior management and their independent public accountants. We
have concluded that changing the accounting treatment for these transactions is
necessary."
Mr. Wygod stated, "The principal benefits of the Medical Manager merger
remain unchanged. Medical Manager's strategic relationship with physicians is an
extremely valuable asset as our economy is rapidly transforming towards
e-commerce. CareInsite's innovative services and Medical Manager's strong
presence in the physician marketplace is a powerful strategic combination which
creates significant competitive advantages and opportunities for the new
combined company. We anticipate being in a position to further demonstrate this
by announcing key strategic transactions in the coming weeks."
Mr. Wygod stated, "CareInsite is in advanced stages of negotiations
regarding certain key strategic transactions which the Company anticipates will
be finalized within the next two weeks. These strategic transactions will
substantially strengthen Medical Manager's position with physicians and
CareInsite's relationships with key payers and trading partners. Medical Manager
believes that these transactions, if consummated, together with other
significant initiatives underway at Medical Manager, will materially benefit
Medical Manager, as well as CareInsite." Medical Manager cautioned that there
can be no assurances that these transactions will be completed.
In commenting on the fourth quarter and year-end results for CareInsite,
Mr. Wygod said, "In addition to the successful completion of CareInsite's
initial public offering, we continued to strengthen our foothold in the New York
metropolitan area as well as build our regional presence with national payers.
During the quarter, contracts were signed with Horizon Blue Cross Blue Shield of
New Jersey, Caremark, National Prescription Administrators and Prudential
HealthCare. In recent weeks, CareInsite has secured agreements with local and
regional health plans totaling an additional 2.4 million lives." He continued,
"In terms of aggregating a critical mass of physicians, the Company has signed
agreements with five practice management system, billing and physician services
vendors totaling 6,500 physicians in the New York metropolitan area. This brings
the number of physicians in New York/New Jersey with whom CareInsite has
exclusive or preferred relationships with to more than 20,000. Combining this
regional presence with CareInsite's relationship with Medical Manager and other
national practice management vendors, we believe nearly 180,000 physicians will
have access to our healthcare e-commerce services."
For the year ended June 30, 1999, the Company also noted that its plastics
and filtration technologies subsidiary, Porex Corporation, reported an increase
in pre-tax income of 38% over the prior year. During the year, Porex acquired
Point Plastics, a manufacturer of high-volume disposable plastic products and
the KippGroup, a designer, developer and manufacturer of high performance
plastic injection molds and injection molded plastic products for the medical
device industry. This acquisition of KippGroup provided the foundation for
Porex's new Medical Products Group which complements its existing divisions, the
Porous Products Group, the Bio Products
2
<PAGE>
Group and the Surgical Products Group. Due to the vertically integrated nature
of the KippGroup's business, there are unique opportunities in cross-marketing
and distribution to the other businesses within Porex. Commenting on Porex, Mr.
Wygod said, "Reorganizing Porex into four distinct product groups provides
diverse product innovation, cross-marketing opportunities, vast technological
resources, and extensive customer service. Porex continues to focus on
identifying new opportunities both in the U.S. and internationally.
Multinational medical and pharmaceutical companies can now buy from the company
across the four business groups on a global basis. Porex's sales and acquisition
pipeline is active and we expect to see continued growth in fiscal year 2000."
3
<PAGE>
A report on Medical Manager's financial results for the quarter and fiscal year
ended June 30, 1999 is as follows:
<TABLE>
<CAPTION>
MEDICAL MANAGER CORPORATION
SUMMARY FINANCIAL INFORMATION
JUNE 30, 1999
IN THOUSANDS, EXCEPT PER SHARE DATA
(Excludes Medical Manager Health Systems, Inc.)
Three Months Ended Year Ended
June 30, June 30,
1999(a)(c) 1998 1999(b)(c) 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues $31,434 $18,235 $100,164 $64,945
Income/(loss) before provision for
income taxes:
Porex 6,895 5,772 24,880 18,018
CareInsite (5,293) (2,545) (20,010) (10,335)
Corporate and other (165) 1,380 1,337 7,149
------- ------- ------- -------
1,437 4,607 6,207 14,832
Provision for income taxes 1,303 1,724 3,820 5,788
------- ------- ------- -------
Net income $ 134 $ 2,883 $ 2,387 $ 9,044
------- ------- ------- -------
Income per share - basic $ 0.01 $ 0.16 $ 0.12 $ 0.51
Income per share - diluted $ 0.01 $ 0.14 $ 0.11 $ 0.46
Weighted average shares
outstanding - basic 20,552 17,727 19,370 17,671
Weighted average shares
outstanding - diluted 24,490 20,659 21,942 19,834
</TABLE>
- -------------------------
(a)The three months ended June 30, 1999 for CareInsite includes charges related
to the litigation with Merck & Co., Inc. and Merck-Medco Managed Care, L.L.C.
of $1,800 pre-tax and $958 after-tax. This amount represents an $0.05 per
share (basic) and $0.04 per share (diluted) charge for the three months ended
June 30, 1999.
(b)The year ended June 30, 1999 for CareInsite includes charges related to the
litigation with Merck & Co., Inc. and Merck-Medco Managed Care, L.L.C. of
$4,300 pre-tax and $2,586 after-tax. This amount represents a $0.13 per share
(basic) and $0.12 per share (diluted) charge for the year ended June 30,
1999. The year ended June 30, 1999 for CareInsite also includes the
previously announced one time write-off of capitalized software costs
resulting from a transaction with Cerner Corporation of $2,381 pre-tax and
$1,524 after-tax charge or $.08 per share (basic) and $.07 per share
(diluted).
(c)(Net revenues for the three months and year ended June 30, 1999 include
$12,537 and $31,086, respectively, related to the combined revenues of Point
Plastics and the KippGroup acquisitions for which there were no sales in the
comparable prior year periods.
4
<PAGE>
A report on Medical Manager Health System's financial results for the quarter
and fiscal year ended June 30, 1999 is as follows:
MEDICAL MANAGER HEALTH SYSTEMS, INC.
(formerly Medical Manager Corporation)
SUMMARY FINANCIAL INFORMATION
JUNE 30, 1999
IN THOUSANDS, EXCEPT PER SHARE DATA
(Unaudited)
Three Months Ended Year Ended
June 30, June 30,
1999 1998 1999 1998
---- ---- ---- ----
Revenues:
Before restatement $44,447 $34,608 $163,400 $119,569
After restatement 41,681 34,608 157,868 119,569
Income before income taxes:
Before restatement 8,975 7,019 29,125 21,204
After restatement 6,211 7,019 23,737 21,204
Net income:
Before restatement 5,835 4,668 18,801 13,196
After restatement 4,039 4,668 15,299 13,196
5
<PAGE>
THIS PRESS RELEASE CONTAINS CERTAIN FORWARD LOOKING STATEMENTS RELATING TO THE
COMPANY'S FUTURE OPERATIONS, POTENTIAL STRATEGIC TRANSACTIONS, INITIATIVES AT
THE COMPANY, DEALINGS WITH CUSTOMERS AND PARTNERS, DEVELOPMENT AND DEPLOYMENT OF
ITS PRODUCTS AND SERVICES AND EXTERNAL TRANSACTIONS. THESE STATEMENTS ARE BASED
ON THE COMPANY'S CURRENT PLANS AND EXPECTATIONS AND INVOLVE RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL FUTURE ACTIVITIES AND RESULTS OF
OPERATIONS TO BE DIFFERENT FROM THOSE DESCRIBED OR IMPLIED BY SUCH FORWARD
LOOKING STATEMENTS. THE RISKS AND UNCERTAINTIES OF THE COMPANY'S BUSINESSES
INCLUDE, BUT ARE NOT LIMITED TO, PRODUCT DEMAND AND MARKET ACCEPTANCE RISKS,
COSTS OR OPERATIONAL DIFFICULTIES RELATING TO INTEGRATING THE BUSINESSES OF THE
COMPANY AND MEDICAL MANAGER HEALTH SYSTEMS, THE SUCCESSFUL COMPLETION OF
NEGOTIATIONS REGARDING, AND THE CONSUMMATION OF, STRATEGIC TRANSACTIONS, THE
FEASIBILITY OF DEVELOPING COMMERCIALLY PROFITABLE SERVICES, THE EFFECT OF
ECONOMIC CONDITIONS, USER ACCEPTANCE, THE IMPACT OF COMPETITIVE PRODUCTS OR
SERVICES, PRICING, PRODUCT DEVELOPMENT, COMMERCIALIZATION AND TECHNOLOGICAL
DIFFICULTIES, RISKS ASSOCIATED WITH THE INTEGRATION AND MANAGEMENT OF ACQUIRED
BUSINESSES, RISKS AND UNCERTAINTIES INHERENT IN THE OUTCOME OF CERTAIN
LITIGATION, RISKS AND UNCERTAINTIES ASSOCIATED WITH THE EFFECT OF THE LITIGATION
ON THE COMPANY AND OTHER RISKS DETAILED IN THE COMPANY'S SECURITIES AND EXCHANGE
COMMISSION FILINGS. FURTHER INFORMATION ABOUT THESE MATTERS CAN BE FOUND IN THE
COMPANY'S SECURITIES AND EXCHANGE COMMISSION FILINGS. THE COMPANY EXPRESSLY
DISCLAIMS ANY INTENT OR OBLIGATION TO UPDATE THESE FORWARD LOOKING STATEMENTS.
* * * * *
6
