<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE PERIOD ENDED SEPTEMBER 30, 1996
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
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Commission File Number: 0-24336
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INPHYNET MEDICAL MANAGEMENT INC.
--------------------------------
(Exact name of registrant as specified in its charter)
Delaware 65-0501896
-------- ----------
(State of incorporation) (I.R.S. Employer
Identification No.)
1200 South Pine Island Road
Suite 600
Fort Lauderdale, Florida 33324-4460
-----------------------------------
(Address of principal executive office)
(954) 475-1300
-------------------------------
(Registrant's telephone number)
-------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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
---- ----
The number of shares of the registrant's common stock, par value $0.01
per share, outstanding as of November 11, 1996 was 15,801,285.
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INPHYNET MEDICAL MANAGEMENT INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION> Page
----
<S> <C>
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets............................................... 1
Condensed Consolidated Statements of Income......................................... 2
Condensed Consolidated Statements of Cash Flows .................................... 3
Notes to Condensed Consolidated Financial Statements................................ 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations..................................... 6
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings................................................................... 10
Item 2. Changes in Securities............................................................... 10
Item 3. Defaults Upon Senior Securities..................................................... 10
Item 4. Submission of Matters to a Vote of Security Holders................................. 10
Item 5. Other Information................................................................... 10
Item 6. Exhibits and Reports on Form 8-K.................................................... 10
SIGNATURES .................................................................................... 11
EXHIBITS .................................................................................... 12
</TABLE>
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<PAGE> 3
INPHYNET MEDICAL MANAGEMENT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
---------- ----------
ASSETS (UNAUDITED)
<S> <C> <C>
Current Assets:
Cash $ 5,851 $ 1,305
Accounts receivable, net of allowances of approximately
$78,000 and $91,000 at September 30, 1996 and
December 31, 1995, respectively 79,470 69,759
Accounts receivable from affiliates 461 559
---------- ----------
79,931 70,318
Other current assets 11,500 10,206
---------- ----------
Total current assets 97,282 81,829
Equipment, furniture and leasehold improvements, net 10,941 11,186
Other assets:
Cost in excess of net assets acquired, net 36,141 26,111
Other assets 2,891 4,090
---------- ----------
39,032 30,201
---------- ----------
Total assets $ 147,255 $ 123,216
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued compensation and related benefits $ 16,940 $ 15,096
Accounts payable and other current liabilities 28,982 8,018
Reserve for self-insured claims 4,168 7,179
---------- ----------
Total current liabilities 50,090 30,293
Long-term debt, net of current portion 465 9,617
Deferred income taxes 544 938
Stockholders' equity:
Common stock, par value -- $0.01, 50,000 shares authorized, 15,801 and
15,690 issued and outstanding at September 30,
1996 and December 31, 1995, respectively 158 157
Additional paid-in capital 65,886 63,731
Retained earnings 30,112 18,480
---------- ----------
Total stockholders' equity 96,156 82,368
---------- ----------
Total liabilities and stockholders' equity $ 147,255 $ 123,216
========== ==========
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements.
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<PAGE> 4
INPHYNET MEDICAL MANAGEMENT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- -----------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenue $ 113,052 $ 81,569 $ 290,686 $ 239,609
Revenue from affiliates 288 465 1,023 1,389
---------- --------- ---------- ----------
Total revenue 113,340 82,034 291,709 240,998
Expenses:
Compensation and related benefits 60,346 51,561 175,726 154,539
Contracted medical services 33,555 13,254 61,078 36,231
Insurance 3,326 2,756 9,116 8,976
Depreciation 761 633 2,225 1,728
Amortization 388 347 1,120 869
Acquisition and other non-recurring
expenses (see Note 3) -- 2,500 (2) 250 (1) 2,500 (2)
Other 7,237 7,082 21,507 21,469
---------- --------- ---------- ----------
Total operating expenses 105,613 78,133 271,022 226,312
---------- --------- ---------- ----------
Income from operations 7,727 3,901 20,687 14,686
Other income (expense):
Loss on sale of physician practices -- -- (682) (1) --
Interest expense (245) (597) (902) (1,492)
Interest income 107 140 338 326
Other 43 (14) 158 (34)
---------- --------- ---------- ----------
Total other income (expense) (95) (471) (1,088) (1,200)
Income before income tax expense 7,632 3,430 19,599 13,486
Income tax expense 3,015 2,222 7,742 6,286
---------- --------- ---------- ----------
Net income $ 4,617 $ 1,208 $ 11,857 $ 7,200
========== ========= ========== ==========
Net income per share $ 0.29 $ 0.08 (2) $ 0.74 (1) $ 0.48 (2)
========== ========= ========== ==========
Weighted average shares outstanding 15,966 15,026 16,027 14,908
========== ========= ========== ==========
</TABLE>
(1) One time charges consisting of loss on sale of physician practices of
$682,000 and certain management restructuring charges of $250,000 were
recorded during the three months ended June 30, 1996, which represents
$0.04 per share. Excluding these amounts, net income per share for the nine
months ended September 30, 1996 was $0.78.
(2) One time charges consisting of acquisition expenses of $1,700,000 and
certain management restructuring charges of $800,000 were recorded during
the three months ended September 30, 1995, which represents $0.16 per
share. Excluding these amounts, net income per share for the three and nine
months ended September 30, 1995 was $0.24 and $0.64, respectively.
See accompanying notes to Condensed Consolidated Financial Statements.
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<PAGE> 5
INPHYNET MEDICAL MANAGEMENT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
1996 1995
---- ----
<S> <C> <C>
Net cash provided by operating activities $ 17,558 $ 952
Cash flows from investing activities:
Acquisitions, net of cash acquired (3,054) (6,899)
Purchases of equipment (3,064) (2,252)
Net cash collections from (advances to) affiliates 622 (619)
Other investing activities 186 (302)
--------- ---------
Net cash used in investing activities (5,310) (10,072)
Cash flows from financing activities:
Proceeds from borrowings of long-term debt 10,700 22,173
Principal payments on long-term debt (19,855) (6,432)
Distributions of accounts receivable
not purchased in a prior acquisition -- (1,050)
Proceeds from exercise of stock options 1,453 692
Other -- (69)
--------- ---------
Net cash (used in) provided by financing activities (7,702) 15,314
--------- ---------
Net increase in cash 4,546 6,194
Cash at beginning of period 1,305 1,422
--------- ---------
Cash at end of period $ 5,851 $ 7,616
========= =========
</TABLE>
See accompanying notes to Condensed Consolidated Financial Statements.
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INPHYNET MEDICAL MANAGEMENT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements (the
"Financial Statements") of Inphynet Medical Management Inc. and Subsidiaries
(the "Company") are unaudited, and in the opinion of management, include all
significant normal and recurring adjustments which are necessary for a fair
presentation in accordance with generally accepted accounting principles.
Accordingly, the Financial Statements should be read in conjunction with the
more complete disclosures contained in the Company's audited consolidated
financial statements included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1995. The results of operations for the interim
periods presented are not necessarily indicative of the results of operations
for the full year. Certain amounts in the prior year's Financial Statements have
been reclassified to conform the current year's presentation.
2. NEW PRONOUNCEMENTS
In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("Statement 123"), which provides an alternative to Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB 25"). Statement 123 allows for a fair value based method of accounting for
stock options and similar equity instruments. However, for companies that
continue to account for stock-based compensation arrangements under APB 25,
Statement 123 requires disclosure of the pro forma effect on net income and
earnings per share of its fair value based accounting for those arrangements.
The requirements of Statement 123 are effective for fiscal years beginning after
December 15, 1995, or upon initial adoption of the statement, if earlier. The
disclosure requirements of Statement 123, including the pro forma information,
need not be applied to interim financial statements unless a complete set of
financial statements is presented for that period. The Company has concluded
that it will continue to account for stock-based compensation arrangements under
APB 25.
3. ACQUISITIONS
Effective July 1, 1996, the Company entered into a contract with PCA Health
Plans of Florida, Inc. (PCA), to provide and arrange for, under various prepaid
health services plans, certain covered services to be provided to certain
persons who are enrolled as members in a PCA Health Plan in Florida. As part of
this contract, the Company acquired certain physician provider contracts from
PCA.
Pursuant to the contract, the Company will receive compensation in the form
of monthly capitation payments from PCA and will assume the risk associated with
the management of physician provider medical costs. To secure its obligation
under the agreement, the Company is required to provide PCA a letter of credit
(LOC) for an amount which is initially equal to approximately two months of
capitation payments. As of September 30, 1996, the amount outstanding under the
LOC was approximately $13.0 million.
Effective July 1, 1996, in a transaction accounted for as a purchase, the
Company acquired certain assets and contracts of NHS National Health Services,
Inc. (NHS) for a purchase price contingent upon the assets' operating
performance over a five year period following closing. In accordance with APB
16, "Business Combinations," the recognition of costs in excess of net assets
acquired will occur when the contingency is determinable. The purchase agreement
requires that installments of the purchase price be determined following each
annual anniversary of the transaction's effective date for a period of five
years.
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<PAGE> 7
INPHYNET MEDICAL MANAGEMENT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
3. ACQUISITIONS (CONTINUED)
Effective July 1, 1995 and September 1, 1995, respectively, the Company
acquired MetroAmerican Radiology, Inc. and an affiliated entity
("MetroAmerican") and Radiology Associates of Hollywood, Inc. and affiliated
entities ("Radiology Associates") in stock transactions accounted for using the
pooling of interests method.
In connection with the acquisition of MetroAmerican, the Company exchanged
approximately 473,000 shares of its common stock for all of the outstanding
shares of MetroAmerican. As a result of this transaction, the Company acquired
contracts to provide radiology services on a fee-for-service basis at various
hospitals and clinics located in nine states. The expenses associated with the
transactions were approximately $0.5 million.
Prior to July 1, 1995, MetroAmerican was taxed as an S Corporation and,
accordingly, was not subject to corporate income taxes. Concurrent with the
acquisition of MetroAmerican, MetroAmerican converted to C Corporation status
with respect to federal and state income taxes. Accordingly, the Company
recorded a charge to income tax expense of approximately $0.9 million to reflect
the cumulative effect of adopting Financial Accounting Standards Board Statement
No. 109, "Accounting for Income Taxes" ("FASB 109").
In connection with the acquisition of Radiology Associates, the Company
exchanged 1,625,000 shares of its common stock for all of the outstanding shares
of Radiology Associates. Radiology Associates provides radiology and management
services to various hospitals, outpatient centers, radiology oncology centers
and a regional teleradiology reading facility. Expenses associated with the
transaction were approximately $1.2 million.
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<PAGE> 8
INPHYNET MEDICAL MANAGEMENT INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
The Company commenced operations in 1974 to provide physician practice
management services to hospital emergency departments. Since that time, the
Company has expanded its business to include (i) the Hospital Physician Services
division, through which it delivers emergency medicine and other hospital-based
physician services, and (ii) the Capitated Medical Services division, through
which it manages the delivery of comprehensive medical services under contracts
with HMOs and correctional institutions and the delivery of fee-for-service
medical services through primary care practices and home health agencies.
The Company's contracts with its hospital physician services clients
typically provide for payments on either a fee-for-service basis, whereby the
Company bills patients or third-party payors directly for medical services, or a
flat-fee basis, whereby the Company is paid a fixed amount by the hospital based
on the number of hours of medical staffing provided or the number of patients
treated. Fee-for-service contracts may, in certain instances, involve the
payment of a subsidy to the Company by the client. Under capitated medical
services contracts, the Company receives a fixed monthly fee from third-party
payors for each covered life in exchange for assuming responsibility for the
provision for medical services. Fee-for-service contracts, which usually require
the Company to assume the financial risks relating to patient volume, payor mix
and reimbursement rates, have longer collection periods than flat-fee and
capitated fee contracts and require the Company to bear the credit risk of
collecting from uninsured individuals.
The Company's growth has historically resulted from increases in the number
of patient visits and fees for services provided under existing contracts, the
award of new contracts, and acquisitions. During the first three quarters of
1996, the Company acquired a primary care practice, certain contracts and other
assets of NHS and contracts to provide subcapitated services to certain PCA
enrollees.
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<PAGE> 9
The following discussion provides an assessment of the Company's results of
operations and liquidity and capital resources and should be read in conjunction
with the Financial Statements included elsewhere in this document.
RESULTS OF OPERATIONS
The following table sets forth net revenue for the periods indicated (in
millions):
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------- ----------------------------------
PERCENT PERCENT
1996 INCREASE 1995 1996 INCREASE 1995
---- -------- ---- ---- -------- ----
<S> <C> <C> <C> <C> <C> <C>
Hospital Physician Services Division $ 54.3 2.8% $ 52.8 $ 163.0 3.2% $ 158.0
Capitated Medical Services Division:
Managed Care 35.8 98.9% 18.0 74.5 43.3% 52.0
Correctional Care 23.2 107.1% 11.2 54.2 74.8% 31.0
--------- --------- --------- ---------
Total Capitated Medical Services Division 59.0 102.1% 29.2 128.7 55.1% 83.0
--------- --------- --------- ---------
Total revenue $ 113.3 38.2% $ 82.0 $ 291.7 21.0% $ 241.0
========= ========= ========= =========
</TABLE>
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1995
Total revenue. Total revenue increased by $31.3 million, or 38.2%, to
$113.3 million for the three months ended September 30, 1996 from $82.0 million
for the same period in 1995. The increase was primarily due to the PCA and NHS
acquisitions, new contract awards and increased revenues from existing
contracts.
Hospital Physician Services Division revenue increased by $1.5 million, or
2.8%, to $54.3 million for the three months ended September 30, 1996 from $52.8
million for the same period in 1995, primarily as a result of increased revenue
from existing contracts.
Capitated Medical Services Division revenue increased by $29.8 million, or
102.1%, to $59.0 million for the three months ended September 30, 1996 from
$29.2 million for the same period in 1995. The increase was primarily due to the
PCA and NHS acquisitions, a new correctional care contract and rate increases
related to existing contracts.
Total operating expenses. Total operating expenses increased by $27.5
million, or 35.2%, to $105.6 million for the three months ended September 30,
1996 from $78.1 million for the same period in 1995. The increase was primarily
due to an increase in compensation expense and related benefits of $8.8 million
resulting from an increase in the number of healthcare and administrative
personnel associated with the NHS acquisition, new contracts awarded, and an
increase in contracted medical services of $20.3 million due primarily to the
PCA and NHS acquisitions and the new correctional care contract awarded to the
Company. The increase in operating expenses was offset by non-recurring costs
incurred in the prior year (see Note 3) in connection with the 1995 acquisitions
of MetroAmerican and Radiology Associates of approximately $1.7 million and
management restructuring costs of approximately $0.8 million.
Income before income tax expense. Income before income tax expense
increased by $4.2 million, or 123.5%, to $7.6 million for the three months ended
September 30, 1996 from $3.4 million for the same period in 1995 due primarily
to the factors set forth above.
Income tax expense. Income tax expense increased by $0.8 million, or 36.4%,
to $3.0 million for the three months ended September 30, 1996 versus $2.2
million for the same period in 1995. The increase was due to the increase in
income before income tax expense. The increase was partially offset by a 1995
tax charge of
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<PAGE> 10
approximately $0.9 million incurred in the third quarter of 1995 from the
conversion of one of the Company's subsidiaries from an S Corporation to a C
Corporation upon its acquisition.
Net income. Net income increased by $3.4 million, or 283.3%, to $4.6
million for the three months ended September 30, 1996, from $1.2 million for the
same period in 1995 due to the factors discussed above.
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1995
Total revenue. Total revenue increased by $50.7 million, or 21.0%, to
$291.7 million for the nine months ended September 30, 1996 from $241.0 million
for the same period in 1995. The increase was primarily due to the PCA and NHS
acquisitions, new contract awards and increased revenues from existing
contracts.
Hospital Physician Services Division revenue increased by $5.0 million, or
3.2%, to $163.0 million for the nine months ended September 30, 1996 from $158.0
million for the same period in 1995, primarily as a result of increased revenue
from existing contracts.
Capitated Medical Services Division revenue increased by $45.7 million, or
55.1%, to $128.7 million for the nine months ended September 30, 1996 from $83.0
million for the same period in 1995. The increase was primarily due to the PCA
and NHS acquisitions, new correctional care contracts awarded and rate increases
related to existing contracts.
Total operating expenses. Total operating expenses increased by $44.7
million, or 19.8%, to $271.0 million for the nine months ended September 30,
1996 from $226.3 million for the same period in 1995. The increase was primarily
due to an increase in compensation expense and related benefits of $21.2 million
resulting from an increase in the number of healthcare and administrative
personnel associated with the NHS acquisition, new contracts awarded, and an
increase in contracted medical services of $24.8 million due primarily to the
PCA and NHS acquisitions, and new correctional care contracts awarded to the
Company. The increase in operating expenses was offset by non-recurring costs
incurred in the prior year (see Note 3) in connection with the 1995 acquisitions
of MetroAmerican and Radiology Associates of approximately $1.7 million and
management restructuring costs of approximately $0.8 million.
Income before income tax expense. Income before income tax expense
increased by $6.1 million, or 45.2%, to $19.6 million for the nine months ended
September 30, 1996 from $13.5 million for the same period in 1995 due primarily
to the factors set forth above.
Income tax expense. Income tax expense increased by $1.4 million, or 22.2%,
to $7.7 million for the nine months ended September 30, 1996 versus $6.3 million
for the same period in 1995. The increase was due to the increase in income
before income tax expense. The increase was partially offset by a 1995 tax
charge of approximately $0.9 million from the conversion of one of the Company's
subsidiaries from a S Corporation to a C Corporation upon its acquisition.
Net income. Net income increased by $4.7 million, or 65.3%, to $11.9
million for the nine months ended September 30, 1996, from $7.2 million for the
same period in 1995 due to the factors discussed above.
LIQUIDITY AND CAPITAL RESOURCES
Nine Months Ended September 30, 1996. Net cash provided by operating
activities was $17.6 million for the nine months ended September 30, 1996, due
primarily to cash generated from operations, an increase of $9.7 million in
accounts receivable due to the NHS acquisition and the startup of new
corrections contracts, and an increase in accounts payable of $13.3 million due
to an increase in outstanding contracted medical services associated with the
PCA and NHS acquisitions.
Net cash used in investing activities of $5.3 million was primarily the
result of expenditures of $3.1 million for acquisitions and purchases of capital
equipment for $3.1 million.
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<PAGE> 11
Net cash used in financing activities of $7.7 million was primarily the
result of borrowings of $10.7 million under the Company's Credit Facility and
$1.5 million received from the exercise of stock options, offset by principal
payments under the Credit Facility of $19.9 million.
As a result of the factors discussed above, cash increased to $5.9 million
at September 30, 1996 from $1.3 million at December 31, 1995.
Nine Months Ended September 30, 1995. Net cash provided by operating
activities was $1.0 million for the nine months ended September 30, 1995, due
primarily to cash generated from operations offset by non-recurring payments of
$1.7 million for acquisition expenses related to the acquisitions of
MetroAmerican and Radiology Associates, an increase in accounts receivable of
approximately $8.2 million partially caused by the Company's implementation of a
new fee-for-service billing system in the first half of 1995 and, new
correctional care, Department of Defense and hospital services contracts awarded
to the Company.
Net cash used in investing activities of $10.1 million was primarily the
result of expenditures of $6.9 million for acquisitions, and purchases of
capital equipment for $2.3 million.
Net cash provided by financing activities of $15.3 million was primarily
the result of borrowings of $22.2 million under the Company's Credit Facility,
offset by principal payments under the Credit Facility of $6.4 million and
distributions of $1.1 million of collected accounts receivable not purchased by
the Company in a 1993 acquisition. The Company provided collection services for
a fee to the former shareholders of said acquisition.
As a result of the factors discussed above, cash increased to $7.6 million
at September 30, 1995 from $1.5 million at December 31, 1994.
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<PAGE> 12
INPHYNET MEDICAL MANAGEMENT INC. AND SUBSIDIARIES
PART II -- OTHER INFORMATION
ITEM 1: Legal Proceedings
The Company is involved in various legal proceedings
incidental to its business, substantially all of which
involve claims related to the alleged malpractice of
employed and contracted medical professionals and to
the failure to render care. In the opinion of the
Company's management, no individual item of litigation
or group of similar items of litigation, taking into
account the insurance coverage available to the
Company, is likely to have a material adverse effect
on the Company's financial position.
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
11 - Statement Re: Computation of Per-Share Earnings
27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
None
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<PAGE> 13
INPHYNET MEDICAL MANAGEMENT INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Inphynet Medical Management Inc.
(registrant)
<TABLE>
<S> <C>
Date: November 13, 1996 By: /s/ J. Clifford Findeiss, M.D.
--------------------------------
J. Clifford Findeiss, M.D.
President, Chief Executive Officer and
Chairman of the Board
Date: November 13, 1996 By: /s/ George W. McCleary, Jr.
-----------------------------
George W. McCleary, Jr.
Executive Vice President, Chief
Financial Officer, Secretary
and Director
</TABLE>
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<PAGE> 1
INPHYNET MEDICAL MANAGEMENT INC. AND SUBSIDIARIES
EXHIBIT 11 - STATEMENT RE: COMPUTATION OF PER-SHARE EARNINGS
(IN THOUSANDS, EXCEPT PER-SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------- ----------------
1996 1995 1996 1995
<S> <C> <C> <C> <C>
PRIMARY AND FULLY DILUTED
Weighted average shares outstanding 15,798 14,640 15,762 14,601
Effect of dilutive stock options based on the
treasury stock method 168 386 265 307
------- ------- ------- -------
Total weighted average shares outstanding 15,966 15,026 16,027 14,908
======= ======= ======= =======
Net income $ 4,617 $ 1,208 $11,857 $ 7,200
======= ======= ======= =======
Net income per share $ 0.29 $ 0.08 $ 0.74 $ 0.48
======= ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 5,851
<SECURITIES> 0
<RECEIVABLES> 157,931
<ALLOWANCES> 78,000
<INVENTORY> 0
<CURRENT-ASSETS> 97,282
<PP&E> 10,941
<DEPRECIATION> 0
<TOTAL-ASSETS> 147,255
<CURRENT-LIABILITIES> 50,090
<BONDS> 465
0
0
<COMMON> 158
<OTHER-SE> 95,998
<TOTAL-LIABILITY-AND-EQUITY> 147,225
<SALES> 0
<TOTAL-REVENUES> 291,709
<CGS> 0
<TOTAL-COSTS> 270,526
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 902
<INCOME-PRETAX> 19,599
<INCOME-TAX> 7,742
<INCOME-CONTINUING> 11,857
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,857
<EPS-PRIMARY> .74
<EPS-DILUTED> .74
</TABLE>
