SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Filed pursuant to Section 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
March 3, 1998 (March 3, 1998)
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Date of Report (Date of earliest event reported)
PHYSICIAN COMPUTER NETWORK, INC.
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(Exact name of registrant as specified in charter)
New Jersey
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(State or other jurisdiction of incorporation)
0-19666
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(Commission File Number)
22-2485688
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(IRS Employer Identification No.)
1200 The American Road
Morris Plains, New Jersey 07950
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(Address of principal executive officers)
(201) 490-3100
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(Registrant's telephone number, including area code)
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ITEM 5. Other Events
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On March 3, 1998, the Registrant issued a press release announcing that,
among other things: (i) it does not expect to release its final results for the
fourth quarter and the year ended December 31, 1997 until later in March 1998;
(ii) it expects to report a net loss from operations for the year ended
December 31, 1997; and (iii) it expects to report a loss from
operations for the fourth quarter of 1997 and will restate its results for each
of the first three quarters of 1997 to report a loss from operations for each of
those quarters. A copy of the press release containing these announcements is
filed herewith as an exhibit and incorporated herein by reference.
ITEM 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
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No financial statements or pro forma financial information are required to
be filed as a part of this report. There are no financial exhibits filed as part
of this report.
(c) Exhibits.
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Exhibit 1 -- Press Release dated March 3, 1998.
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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.
PHYSICIAN COMPUTER NETWORK, INC.
(REGISTRANT)
Date: March 3, 1998 By: /s/Kenneth Ernsting
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Kenneth Ernsting
Senior Vice President
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EXHIBIT INDEX
Exhibit 1 Press Release dated March 3, 1998.
For Immediate Release
Physician Computer Network, Inc. Announces Postponement of Release of 4th
Quarter and 1997 Annual Results; Expects to Report Loss for such Periods
Morris Plains, NJ (March 3, 1998) - Physician Computer Network, Inc. (NASDAQ:
PCNI) today announced that it does not expect to release its final results for
the fourth quarter and the year ended December 31, 1997 until later in March
1998. The completion of the Company's 1997 audit has been delayed because the
Company's independent auditors, KPMG Peat Marwick, have recently identified
certain instances during the 1997 period in which the Company has improperly
recognized items of revenue and expense. While the Company, with the assistance
of its auditors, is continuing to review the nature and extent of these matters
and the effect of these matters on the Company's financial results, the Company
expects to report a net loss from operations for the year ended December 31,
1997. The Company expects to report a loss from operations for the fourth
quarter of 1997 and will restate its results for each of the first three
quarters of 1997 to report a loss from operations for each of those quarters.
The amount of 1997 losses from operations has not yet been definitively
determined, but is currently estimated to range from $27 million to $31 million.
The Company's results are also expected to include certain one-time, non- cash,
special charges unrelated to the issues of revenue and expense recognition
referred to above. These one-time special charges are related primarily to the
impairment of intangibles and the carrying value of goodwill. While the amount
of special charges has not yet been definitively determined, the amount of those
charges is currently expected to be approximately $25 million, if not more. The
Company also announced that Jack Mortell, President of the Company, has taken a
temporary leave of absence from the Company pending completion of the audit.
The losses from operations and special charges referred to above are expected to
result in a violation of certain financial covenants contained in the Company's
senior credit facility. The Company has informed the administrative agent for
its lenders about such matters and intends to meet with the administrative agent
to discuss the development of a satisfactory resolution to such issues. If such
resolution is not forthcoming the Company may suffer an event of default under
its senior credit facility or the Company's ability to continue to borrow
thereunder may be impaired.
The Company's audit is moving forward at an aggressive pace so that the Company
can definitively announce its results as quickly as possible. Despite the
expected losses, the Company continues to maintain a large installed base of
customers using its products and believes that the PCN Health Network
Information System, the Company's industry leading practice management software
product, continues to be extremely well received in the market place.
Anticipated product releases for 1998 remain on schedule, with the release of
PCN Health Network Information System Version 1.5 expected in April 1998,
followed by the release of the Oracle- based version 2.0 in July 1998 and 2.1 by
December 1998. Additionally, the Company has been encouraged by the increased
rate of acceptance of the clinical patient records products offered by
HealthPoint G.P., the Company's joint venture.
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The Company's expectations are preliminary, subject to the Company closing its
books and Company's management and independent auditors completing the 1997
audit. The estimated amount of loss, anticipated release of final results and
the potential consequences of the foregoing matters, including, without
limitation, resolution of expected violations under the Company's senior credit
facility, discussed in this press release constitute forward-looking statements.
Actual results for the Company's fourth quarter and for the 1997 fiscal year
could differ materially from those estimated, depending on a number of factors
including whether all sales recorded on account of any particular period meet
applicable revenue recognition requirements, the adequacy of estimated expense
accruals and reserves and the evaluation of the impairment of intangible assets.
Additional factors which may effect the Company's operations and business are
described in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, and the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997.
Physician Computer Network is a leader in developing, marketing and supporting
information technology to physician-based healthcare organizations, including
group practices, integrated delivery networks, MSOs, IPAs and other models of
physician organizations. PCN's application software products address the
financial, clinical, administrative and management needs within these
organizations and facilitate electronic connectivity between them and other
healthcare industry entities including hospitals, clinical laboratories, managed
care providers and insurance intermediaries.
