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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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):
January 16, 1998 (January 12, 1998)
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PHYCOR, INC.
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(Exact name of registrant as specified in its charter)
Tennessee 0-19786 62-13344801
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(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification
Incorporation) Number)
30 Burton Hills Boulevard
Suite 400
Nashville, Tennessee 37015
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(Address of principal executive offices) (Zip Code)
(615) 665-9066
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(Registrant's telephone number, including area code)
Not applicable
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(Former name or former address, if changed since last report)
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Page 1 of 4 pages
Exhibit Index located on Page 4
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ITEM 5. OTHER EVENTS.
On January 12, 1998, PhyCor, Inc., a Tennessee corporation
(the "Company"), announced that it anticipates recording pre-tax charges to
earnings in the fourth quarter of 1997 and the first quarter of 1998 of
approximately $83 million and $37 million, respectively. These anticipated
nonrecurring charges relate to merger expenses, asset revaluations and
operational restructuring activities.
The press release announcing the anticipated nonrecurring
charges to the Company's earnings is attached hereto as Exhibit 99 and is
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired.
None required
(b) Pro Forma Financial Information.
None required
(c) Exhibits.
99 Form of press release issued by the Registrant
announcing the anticipated nonrecurring charges
relating to merger expenses, asset revaluations and
operational restructuring activities
2
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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 hereunto duly authorized.
PHYCOR, INC.
By: /s/ N. Carolyn Forehand, Esq.
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N. Carolyn Forehand, Esq.
Vice President
Date: January 16, 1998
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
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<S> <C> <C>
99 -- Form of press release issued by the Registrant announcing the
anticipated nonrecurring charges relating to merger expenses,
asset revaluations and operational restructuring activities.
</TABLE>
4
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PHYCOR(R)
The Physicians' Corporation NEWS RELEASE
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Contact: Joseph C. Hutts
President and Chief Executive Officer
or
John K. Crawford
Chief Financial Officer
or
J. Shawn Carder
Director of Investor Relations
(615) 665-9066
PHYCOR ANNOUNCES NONRECURRING CHARGES RELATING
TO MERGER EXPENSES, ASSET REVALUATIONS
AND OPERATIONAL RESTRUCTURING ACTIVITIES
Nashville, Tennessee (January 12, 1998) - PhyCor, Inc. (Nasdaq/NM:PHYC)
announced today that it anticipates recording, in the first quarter of 1998, a
pre-tax charge to earnings of approximately $15 million relating to its
recently terminated merger with MedPartners, Inc. (NYSE:MDM). The Company also
announced plans to restructure five of its multi-specialty clinic operations
with approximately 300 physicians and provide for the potential sale or closure
of two additional clinics with approximately 70 physicians.
In connection with these plans, the Company anticipates recording a
pre-tax charge for asset revaluation of approximately $83 million in the fourth
quarter of 1997, of which approximately $70 million represents intangible asset
value. In addition, the Company expects to incur approximately $22 million in
the first quarter of 1998 in pre-tax restructuring charges relating to
anticipated costs which are to provide for consolidating facilities and clinic
operations and to reduce overhead costs.
Exclusive of these nonrecurring costs, these restructuring plans are not
expected to adversely affect the Company's earnings targets for either 1997 or
1998.
-MORE-
PHYCOR, Inc. - 30 Burton Hills Blvd. - Suite 400 - Nashville, Tenn. 37215 -
615-665-9066
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PHYCOR Announces Nonrecurring Charges
Page 2
January 12, 1998
"These plans involve clinics that represent less than 6% of PhyCor's
operating income for the nine months ended September 30, 1997, and the total
charges, net of taxes, represent approximately 5% of total assets as of the end
of the third quarter of 1997," commented John K. Crawford, chief financial
officer of PhyCor.
"Given the uncertainty surrounding the termination of our merger
discussions, we felt it was important to announce these plans and actions as
early as possible and to confirm our strong expectations for 1997 and 1998
earnings," said Joseph C. Hutts, president and chief executive officer of
PhyCor. "These restructured groups primarily represent first generation attempts
at new group formations. These plans address problems that have developed in
these markets, but we modified our approach early and have, for some time, been
successful in the formation of several new groups. Overall, our operations are
sound, our pipeline is strong, our people are confident, and we feel we are
positioned to lead this facet of the health field and make a difference in our
health care system," concluded Hutts.
In December 1997, PhyCor announced that it had signed two separate
agreements to purchase Atlanta-based First Physician Care, Inc., a provider of
practice management services to approximately 200 physicians, and Seattle-based
CareWise, Inc., a nationally recognized leader in the health care
decision-support industry. Both transactions, which are expected to be accounted
for as poolings-of-interests, are expected to close in the first quarter of
1998.
PhyCor, Inc., headquartered in Nashville, Tennessee, is a physician
practice management company that operates multi-specialty clinics and manages
independent practice associations (IPAs). Exclusive of pending transactions,
PhyCor operates 55 clinics with approximately 3,860 physicians in 28 states and
manages IPAs with over 18,700 physicians in 28 markets.
This press release contains forward-looking statements made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
The effect of the restructuring plans referred to herein could vary from the
Company's expectations based upon continued developments, including the actual
amount of expenditures required in connection with the Company's restructuring
plans and other previously disclosed factors, risks and uncertainties
applicable to the business of the Company.
For additional information, visit PhyCor's web site:
http://www.phycor.com
