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) January 10, 1997
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
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Item 5. Other Events
On January 10, 1997 MedCath Incorporated announced that it has formed a venture
with the Arizona Heart Institute to construct a new heart hospital in Phoenix,
Arizona. The Arizona Heart Hospital will be owned and operated by a limited
liability company in which the Company owns a majority interest and serves as
manager. The venture plans to complete the hospital by Spring 1998.
On January 14, 1997, MedCath Incorporated announced that financial results for
the first quarter ended December 31, 1996, are expected to be on target with
consensus analyst expectations of $0.15 per share. The Company also stated that
patient census and cardiovascular procedure volumes at its first heart hospital
in McAllen, Texas, reached record levels during the first quarter.
On January 15, 1997, MedCath Incorporated announced that it disagreed with
several points made in an article about the Company's heart hospital which
appeared on January 15, 1997, in certain regional editions of the Wall Street
Journal.
Exhibits:
99.1 - Press Release dated January 10, 1997
99.2 - Press Release dated January 14, 1997
99.3 - Press Release dated January 15, 1997
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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: January 20, 1997 By: /s/ Richard J. Post
------------------------------------
Richard J. Post
Chief Financial Officer
/s/ Daniel L. Belongia
-------------------------------------
Daniel L. Belongia
Vice President - Finance
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Exhibit 99.1
MEDCATH TO BUILD SIXTH HEART HOSPITAL
Completion of Facility in Phoenix, Arizona
Scheduled for Spring 1998
Charlotte, North Carolina (January 10, 1997) -- MedCath Incorporated
(Nasdaq/NM:MCTH) today announced that it has formed a venture with the Arizona
Heart Institute to construct a new heart hospital to be located in Phoenix,
Arizona. To be named the Arizona Heart Hospital, the venture plans to complete
the hospital by Spring 1998 and will be the Company's sixth heart hospital
project. The Company currently operates one heart hospital, the McAllen Heart
Hospital, and has four others in various stages of development. The Arkansas
Heart Hospital and the Tucson Heart Hospital are both expected to open in
calendar 1997 and the Austin Heart Hospital and the Bakersfield Heart Hospital
are both expected to open in calendar 1998.
The Arizona Heart Hospital will be owned and operated by a limited liability
company in which MedCath owns a majority interest and serves as manager. The
Arizona Heart Institute, with over 50 physicians specializing in the diagnosis
and treatment of heart disease, is another major investor. Other investors
include individual cardiologists and cardiovascular surgeons. The Arizona Heart
Institute, led by Dr. Edward Diethrich, was founded in 1971 and was the nation's
first freestanding outpatient clinic devoted solely to the prevention, detection
and treatment of heart and blood vessel diseases. The Institute and its
physician partners are widely recognized as innovators in the field of heart
disease diagnosis and advanced treatment modalities.
Stephen R. Puckett, president of MedCath said, "We are very excited about this
heart hospital in Phoenix, Arizona, and our physician partners. The Arizona
Heart Institute is one of the premier cardiac care facilities in the world. Dr.
Diethrich is an internationally renowned cardiovascular surgeon who has
pioneered many diagnostic and surgical techniques, all of which have been
milestones in improving the quality of cardiac care. He is considered the
authority on endovascular surgery and leads an outstanding group of physicians
at the Institute with whom we are very pleased to have joined forces. This
hospital will be our second in the state of Arizona and, coupled with our
existing cath labs and physician group practice, gives us a very strong platform
on which to build a statewide integrated cardiovascular care system."
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 five
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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Exhibit 99.2
MEDCATH ON TARGET WITH STREET ESTIMATES
CITES MAJOR IMPROVEMENTS AT FIRST HEART HOSPITAL
Charlotte, North Carolina (January 14, 1997) -- MedCath Incorporated
(Nasdaq/NM:MCTH) today announced that financial results for the first quarter
ended December 31, 1996, are expected to be on target with consensus analyst
expectations of $0.15 per share. The Company also stated that patient census and
cardiovascular procedure volumes at its first heart hospital in McAllen, Texas,
reached record levels during the first quarter. The Company expects to release
its first quarter results on January 27, 1997. Stephen R. Puckett, president of
MedCath said, "We are confident that our three operating divisions are
performing at levels which will support these analyst estimates. In particular,
I am pleased to report that our first heart hospital in McAllen, Texas, has
continued to improve and was profitable during the first quarter."
Based upon its market analysis, MedCath believes the McAllen Heart Hospital has
achieved a dominant market share in the region. In calendar year 1996, McAllen
Heart Hospital treated 2,330 patients in its cardiac cath labs which the Company
estimates is approximately a 44% share of the cardiac cath lab marketplace.
During the year, the Company also performed 354 open heart procedures. The
Company also indicated that the volume of patients being treated in its cath
labs and the number of open heart surgeries have both steadily increased,
quarter by quarter, throughout 1996.
Mr. Puckett also stated, "Approximately 82% of McAllen Heart Hospital's first
quarter gross revenues were generated by patients being treated for
cardiovascular disease, with the remainder being split among our cardiovascular
home health agency, 24-hour Emergency Room and other related surgical and
support procedures. This mix of revenues validates our belief that the McAllen
Heart Hospital has the ability to focus on cardiovascular disease while still
providing the full range of care required by this patient population."
In closing, Mr. Puckett said, "Currently, the medical staff of the McAllen Heart
Hospital has increased to 137, including 14 cardiologists. During the quarter,
one physician, who was responsible for less than 5% of the cardiovascular
procedures performed during that quarter, left Valley Cardiology P.A. to start
an independent practice. The group replaced the departed cardiologist by
recruiting an additional cardiologist who has already begun practicing in
McAllen. We are very pleased with the growing number of physicians on our
medical staff, and we are excited that our new hospital has been the catalyst
for expanding cardiology services in this underserved region."
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Statements contained in this press release which are not historical facts may be
considered forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
subject to risks and uncertainties which could cause actual results to differ
materially from those projected. Such risks and uncertainties include
construction and development risks associated with heart hospitals; operating
losses and negative cash flows during the initial operation of heart hospitals;
dependence on physician relationships; dependence on long-term management
contracts; fluctuations in quarterly operating results from seasonality,
population shifts and other factors; dependence on key management; as well as
other risks detailed in the Company's filings with the Securities and Exchange
Commission.
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 five
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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Exhibit 99.3
MEDCATH RESPONDS TO ARTICLE IN REGIONAL EDITION
OF THE WALL STREET JOURNAL
Charlotte, North Carolina (January 15, 1997) -- MedCath Incorporated
(Nasdaq/NM:MCTH) today announced that it disagreed with several points made in a
third article about the Company's heart hospital which appeared today in certain
regional editions of The Wall Street Journal.
Stephen R. Puckett, president of MedCath said, "I suppose we should be flattered
by a national publication's continuing obsession with the day-to-day operations
of our little heart hospital in McAllen, Texas. Instead, we're reminded of Don
Quixote jousting with windmills, unable to distinguish between fact and fiction.
We're just a 60-bed heart hospital trying to prove that capitalism and free
enterprise are alive and well in McAllen, Texas. Isn't there any real news out
there?"
Mr. Puckett added, "The Wall Street Journal insists on concerning itself with
the competitive landscape in McAllen, Texas, while ignoring the remarkable
accomplishments of our hospital. Our climb from 0% market share only one year
earlier to what the Company believes is a dominant 44% cardiac cath lab market
share, with 2,330 patients in its cardiac cath labs and 354 open heart
procedures in 1996, is not only proof of our competitive strength, but also
validates our strategy. In addition, as of today, our census is 100% -- all 60
patient beds are full, and we have four patients awaiting beds in the Emergency
Room."
Mr. Puckett also stated, "We dispute The Wall Street Journal's contention that
82% of first quarter gross revenue, generated by patients being treated for
cardiovascular disease, is not sufficient to establish our facility as a
specialty heart hospital. We are well satisfied with this percentage. The
remaining 18% revenue contribution is split among our cardiovascular home health
agency, 24-hour Emergency Room and other related surgical and support
procedures. The article also indicates that 'an increasing number of ailing
hernias, kidneys and prostate glands' are being treated in the heart hospital.
In fact, during the first quarter of 1997, the heart hospital performed three
hernia repairs, no prostate gland procedures and five kidney procedures."
The Wall Street Journal article also implied that two physician departures had a
significant effect on the hospital. Mr. Puckett responded by saying, "The
hospital's profitability is evidence of the lack of impact. Also, it should be
noted that Dr. Villa, one of the two cardiologists, took a leave of absence
beginning in August 1996 to move to Florida due to personal family issues and
plans to continue his practice at McAllen Heart Hospital upon his return. In his
absence, Dr. Villa's patients are being treated by other Valley Cardiology
physicians; therefore, there has been no impact on the heart hospital from his
departure.
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"In addition, Dr. Koolwal, who left Valley Cardiology P.A. to start an
independent practice, was responsible for less than 5% of the cardiovascular
procedures performed during the quarter immediately prior to his departure. The
group replaced the departed cardiologist by recruiting an additional
cardiologist who has already begun practicing in McAllen. No other cardiologists
have left, and we have continued to add physicians to our medical staff."
In conclusion, Mr. Puckett said, "We remain convinced that our strategy is sound
and the concept viable. Nevertheless, ignoring hard facts and statistics, The
Wall Street Journal quoted a short seller who stated that 'this thing looks like
a lot of hype.' Actually, we believe the short seller may have been confused.
Perhaps, he was referring to this newspaper article when he made that comment."
Statements contained in this press release which are not historical facts may be
considered forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
subject to risks and uncertainties which could cause actual results to differ
materially from those projected. Such risks and uncertainties include
construction and development risks associated with heart hospitals; operating
losses and negative cash flows during the initial operation of heart hospitals;
dependence on physician relationships; dependence on long-term management
contracts; fluctuations in quarterly operating results from seasonality,
population shifts and other factors; dependence on key management; as well as
other risks detailed in the Company's filings with the Securities and Exchange
Commission.
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 five
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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