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) November 14, 1996
MEDCATH INCORPORATED
(Exact name of registrant
as specified in its charter)
North Carolina 33-85458 56-1635096
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
7621 Little Avenue, Suite 106, Charlotte, North Carolina 28226
(Address of principal executive offices)
Registrant's telephone number, including area code (704) 541-3228
Page 1 of 8
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Item 5. Other Events
On November 14, 1996 MedCath Incorporated announced financial results for the
quarter and year ended September 30, 1996.
Revenues for the fourth quarter ended September 30, 1996, increased 99.6% to
$19,322,166 compared with $9,682,193 for the same period in 1995. Net income for
the fourth quarter of 1996 increased 43.0% to $1,501,510, or $0.13 per share, on
11.3 million shares compared with $1,049,685, or $0.12 per share, on 8.9 million
shares for the same period in 1995. Cash flows from operating activities were
$4.9 million for the fourth quarter ended September 30, 1996.
Revenues for the year ended September 30, 1996, increased 65.0% to $66,190,538
compared with $40,105,772 for the same period in 1995. Net income for the year
ended September 30, 1996, increased 22.4% to $5,202,425, or $0.51 per share, on
10.2 million shares compared with $4,251,063, or $.51 per share, on 8.4 million
shares before the extraordinary loss for the same period in 1995. Net income for
the year ended September 30, 1995, after the extraordinary loss was $4,023,112,
or $0.48 per share, on 8.4 million shares. Cash flows from operating activities
were $6.4 million for the year ended September 30, 1996.
On November 20, 1996 MedCath Incorporated announced the opening of a new cath
lab pursuant to a joint-venture agreement with the 442-bed Gaston Memorial
Hospital in Gastonia, North Carolina. The new lab provides in-house cardiology
and cardiovascular services to the hospital.
Exhibits:
99.1 - Press Release dated November 14, 1996
99.2 - Press Release dated November 20, 1996
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
MEDCATH INCORPORATED
Date: November 26, 1996 By: /s/ Richard J. Post
Richard J. Post
Chief Financial Officer
/s/ Daniel L. Belongia
Daniel L. Belongia
Chief Accounting Officer
Page 3 of 8
Exhibit 99.1
MEDCATH INCORPORATED ANNOUNCES FOURTH
QUARTER AND YEAR-END RESULTS
Fourth Quarter EPS of $0.13, Yearly EPS of $0.51
Fourth Quarter Highlights:
McAllen Heart Hospital trends positive
Bakersfield Heart Hospital announced; Four new heart hospitals on
track
Physician Practice Management Division obtains contract to
manage Heart Clinic, P.A.,located in McAllen, Texas
Diagnostics Division expands with opening of Cape Cod and Raleigh labs
Charlotte, North Carolina (November 14, 1996) -- MedCath Incorporated
(Nasdaq/NM:MCTH) today announced financial results for the quarter and year
ended September 30, 1996.
Stephen R. Puckett, president of MedCath Incorporated, said, "Fiscal
1996 has been a landmark year for the Company as we continue to execute our
heart hospital strategy which is an integral part of our focus on comprehensive
cardiac care services. We are particularly pleased with the fourth quarter
performance of our heart hospital in McAllen, Texas. We believe that we have
acquired a dominant market share in McAllen, which has contributed to the
hospital's improving financial performance. In the fourth quarter ended
September 30, 1996, which is the peak of the summer, the heart hospital operated
at virtually break even. The hospital has progressed from losing $0.10 per share
in the third quarter to a loss of less than a $0.01 per share in the fourth
quarter; net profits were earned in August and September."
"In addition, despite the seasonality of the McAllen market during the
summer months of June through September, we met our original projection of
profitable operations in the heart hospital within nine months of opening. Our
labor cost as a percentage of revenue continues to decrease at the hospital and
by year end was slightly over 30%. As the hospital continues to mature and we
become more efficient, our target labor percentage of less than 30% of net
revenue is certainly within reach. As we complete the initial six to nine month
phase-in period of the hospital, we are excited about the future profit
potential at McAllen as well as our four other heart hospitals at various stages
of development."
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Financial Results:
Revenues for the fourth quarter ended September 30, 1996, increased
99.6% to $19,322,166 compared with $9,682,193 for the same period in 1995. Net
income for the fourth quarter of 1996 increased 43.0% to $1,501,510, or $0.13
per share, on 11.3 million shares compared with $1,049,685, or $0.12 per share,
on 8.9 million shares for the same period in 1995. Cash flows from operating
activities were $4.9 million for the fourth quarter ended September 30, 1996.
Revenues for the year ended September 30, 1996, increased 65.0% to
$66,190,538 compared with $40,105,772 for the same period in 1995. Net income
for the year ended September 30, 1996, increased 22.4% to $5,202,425, or $0.51
per share, on 10.2 million shares compared with $4,251,063, or $.51 per share,
on 8.4 million shares before the extraordinary loss for the same period in 1995.
Net income for the year ended September 30, 1995, after the extraordinary loss
was $4,023,112, or $0.48 per share, on 8.4 million shares.
Cash flows from operating activities were $6.4 million for the year ended
September 30, 1996.
Heart Hospital Division:
McAllen Heart Hospital, McAllen, Texas. The Company opened its first
heart hospital, the McAllen Heart Hospital, on January 18, 1996. Since its
opening, revenues have steadily increased due to the upward trend of procedure
volumes and average daily census. As a comparison, net revenue at the hospital
increased 35%, from $5.6 million in the third quarter to $7.6 million in the
fourth quarter. Average daily census in the fourth quarter was 29 compared with
25 in the third quarter.
Bakersfield Heart Hospital, Bakersfield, California. In August, the
Company formed a venture to construct a new hospital in Bakersfield, California.
The Bakersfield Heart Hospital, which is expected to open in Fall 1998, will be
owned and operated by a limited liability company in which MedCath owns a
majority interest and serves as manager. Other investors include 19 of the 22
Bakersfield area cardiologists, five of the six vascular and cardiovascular
surgeons, and 19 other physicians, all of whom will be actively involved in the
design and development of the hospital.
Heart Hospitals Under Development. We are still on track to open the
84-bed Arkansas Heart Hospital, located in Little Rock, Arkansas, in March 1997;
the 60-bed Tucson Heart Hospital, located in Tucson, Arizona, in October 1997;
and the 60-bed Heart Hospital of Austin, located in Austin, Texas, in Spring
1998.
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Physician Practice Management and Diagnostics Divisions:
Continuing Strong Results of Operations. The Company continues to
experience superior profit contribution from its Physician Practice Management
and its Diagnostics Divisions. During fiscal year ended September 30, 1996,
these two divisions achieved record profitability with net income increasing 32%
and net income per share increasing 8% over fiscal 1995. For the fourth quarter,
these two divisions' net income increased 35% and net income per share increased
6% over the same period in 1995.
Heart Clinic, P.A., McAllen, Texas. The Physician Practice Management
Division continued its expansion by entering into a long-term management
contract with Heart Clinic, P. A. in McAllen,Texas, under which the physicians
in the clinic entered into a long-term exclusive employment and noncompete
contract. The Heart Clinic is composed of seven cardiologists, six of
whom are also investors in the Company's heart hospital. Management of the
practice commenced in October 1996.
Diagnostics Division Opens New Cath Labs. In September, MedCath opened
a new cath lab pursuant to a joint venture agreement with 258-bed Cape Cod
Hospital, in Hyannis, Massachusetts. The new lab provides in-house cardiology
and cardiovascular services to the hospital. Cape Cod Hospital and the nine
cardiologists residing in the Cape Cod area serve Barnstable County, with a
year-round population of 189,000 which triples during the summer months.
MedCath's cath lab is the only cath lab in Barnstable County.
Subsequent to the close of the fiscal year, the Company opened a new
outpatient cath lab pursuant to a long-term management agreement with Wake Heart
Associates based in Raleigh, North Carolina. Founded in 1985, Wake Heart
Associates continues to be the premier cardiology practice in Raleigh and the
greater Wake County market. Wake County's population is greater than 500,000,
and it is the second fastest growing county in North Carolina.
Mr. Puckett commented in closing, "The success we have achieved to date
throughout the Company is due to the strong relationships we have forged with
our physician partners and the dedication of the MedCath health care
professionals. We are grateful to the more than 400 physicians associated with
our company for their support and guidance and to our employees whose efforts,
once again, in fiscal 1996, have exceeded our expectations."
MedCath Incorporated is a provider of cardiology and cardiovascular
services through the operation of specialized facilities and the management of
physician practices. The Company operates one specialty heart hospital and has
four additional heart hospitals under development, manages three medical
practices comprised of a total of 76 physicians, manages fixed-site cardiac
diagnostic and therapeutic centers, and owns and operates mobile cardiac
catheterization laboratories serving networks of hospitals.
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<PAGE>
<TABLE>
<CAPTION>
MEDCATH INCORPORATED
Financial Highlights
Three Months Ended Year Ended
September 30, September 30,
- -------------------------------------------------------------------------------- --------------------------------
1996 1995 1996 1995
- -------------------------------------------------------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenue $ 19,322,166 $ 9,682,193 $ 66,190,538 $ 40,105,772
Operating expenses (16,708,892) (7,784,404) (56,293,328) (31,656,585)
--------------- --------------- -------------- ---------------
Income from operations 2,613,274 1,897,789 9,897,210 8,449,187
Income before income taxes
and extraordinary item 2,330,703 1,739,685 8,498,894 7,028,025
Provision for income taxes (829,193) (690,000) (3,296,469) (2,776,962)
--------------- --------------- -------------- ----------------
Income before extraordinary item 1,501,510 1,049,685 5,202,425 4,251,063
Extraordinary loss - - - (227,951)
--------------- ---------------- --------------- ----------------
Net income $ 1,501,510 $ 1,049,685 $ 5,202,425 $ 4,023,112
=============== ================ =============== ================
Net income per common and common equivalent share:
Income before extraordinary item $ 0.13 $ 0.12 $ 0.51 $ 0.51
Extraordinary loss $ - $ - $ - $ (0.03)
--------------- ---------------- --------------- ----------------
Net income per common and
common equivalent share $ 0.13 $ 0.12 $ 0.51 $ 0.48
=============== ================ =============== ================
Weighted average number
of common shares outstanding 11,319,236 8,894,421 10,192,941 8,381,241
=============== ================ =============== ================
</TABLE>
Page 7 of 8
Exhibit 99.2
MEDCATH OPENS CATH LAB IN GASTONIA, NORTH CAROLINA
Charlotte, North Carolina (November 20, 1996) -- MedCath Incorporated
(Nasdaq/NM: MCTH) today announced the opening of a new cath lab pursuant to a
joint venture agreement with the 442-bed Gaston Memorial Hospital in Gastonia,
North Carolina. The new lab provides in-house cardiology and cardiovascular
services to the hospital.
Gaston Memorial Hospital and its four resident cardiologists serve
Gaston County and its population of over 175,000. The fixed-site cath lab has
evolved from the hospital's successful mobile cath program and is a continuation
of its efforts to provide a full range of in-house cardiology and cardiovascular
services in Gaston County. Over the past six years, more than 3,600 diagnostic
cardiac catheterizations have been performed at Gaston Memorial Hospital.
Stephen R. Puckett, president of MedCath said, "I am pleased to
announce this latest milestone in our long-standing relationship with Gaston
Memorial Hospital. Over the past six years, MedCath and Gaston Memorial have
successfully worked together to develop and expand the delivery of cardiology
and cardiovascular care. The resulting increased demand for services has led to
the recruitment of full-time invasive cardiologists to the area and the creation
of a fixed-site lab. This facility is another example of MedCath's ability to
create partnerships in order to deliver high quality, cost-effective cardiology
services."
MedCath Incorporated is a provider of cardiology and cardiovascular
services through the operation of specialized facilities and the management of
physician practices. The Company operates one specialty heart hospital and has
four additional heart hospitals under development, manages three medical
practices comprised of a total of 76 physicians, manages fixed-site cardiac
diagnostic and therapeutic centers, and owns and operates mobile cardiac
catheterization laboratories serving networks of hospitals.
Page 8 of 8
