Document/Exhibit Description Pages Size
1: 10-K Annual Report 20 107K
2: EX-10.2 Amendment to Loan Agreement 7 24K
3: EX-10.6 Board Action by Consent 6 20K
4: EX-13.1 1995 Annual Report 31 132K
5: EX-22.1 List of Subsidiaries 3 13K
6: EX-27 Article 5 FDS 2 8K
7: EX-99 Rotech Notice & Proxy 8 41K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended July 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______________ to ________________
Commission File Number 0-14003
ROTECH MEDICAL CORPORATION
(Exact name of Registrant as specified in its charter)
Florida 59-2115892
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
4506 L.B. McLeod Road, Suite F
Orlando, Florida 32811
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (407) 841-2115
Securities registered pursuant to Section 12(g) of the Act:
Title of Class: Common Stock, par value $.0002 per share
--------------
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 aggregate market value of the Registrant's voting stock held by
nonaffiliates of the Registrant, computed by reference to the last sale price
per share, as of October 19, 1995, was $278,785,612.
On October 19, 1995, RoTech Medical Corporation had 11,990,779 shares of its
$.0002 par value Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the proxy statement to security holders, in connection with the
annual meeting of shareholders to be held on December 8, 1995, are incorporated
into Part III.
ROTECH MEDICAL CORPORATION
FORM 10-K ANNUAL REPORT
FISCAL YEAR ENDED JULY 31, 1995
PART I: PAGE
Item 1 Business............................................................ 3
Item 2 Properties.......................................................... 11
Item 3 Legal Proceedings................................................... 12
Item 4 Submission of Matters to a Vote of Security Holders................. 12
PART II:
Item 5 Market for Registrant's Common Equity and Related Stockholder
Matters............................................................. 12
Item 6 Selected Financial Data............................................. 12
Item 7 Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................... 12
Item 8 Financial Statements and Supplementary Data......................... 16
Item 9 Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure................................................ 16
PART III:
Item 10 Directors and Executive Officers of the Registrant.................. 16
Item 11 Executive Compensation.............................................. 16
Item 12 Security Ownership of Certain Beneficial Owners and Management...... 17
Item 13 Certain Relationships and Related Transactions...................... 17
PART IV:
Item 14 Exhibits, Financial Statement Schedules, and Reports on Form 8-K.... 17
2
PART 1
------
ITEM 1. BUSINESS
-----------------
GENERAL
RoTech Medical Corporation ("RoTech" or the "Company") provides
comprehensive home health care and primary care physician services to patients
in non-urban areas. RoTech operated 205 home health care locations and 20
primary care physician practices, employing 26 physicians as of July 31, 1995,
and has subsequently acquired an additional 50 home health care locations. The
Company's home health care business provides a diversified range of products and
services, with emphasis on respiratory and home infusion therapies. RoTech has
pursued an aggressive acquisition strategy since 1988 which included in fiscal
1995 acquisitions of 56 locations of smaller home health care companies and the
opening of 15 new locations. Current industry estimates indicate that
approximately half of the nation's home health care industry remains fragmented
and is run by either single operators or small, local chains. These smaller
providers are RoTech's main competition and main acquisition opportunities. The
Company plans to continue to enter new home health care markets through
acquisition or start-up as competitive and pricing pressures encourage
consolidation and economies of scale. In January 1994, the Company expanded this
strategy to include the acquisition of primary care physician practices in
certain markets to enable the ultimate development of an integrated primary
health care delivery system capable of providing a broad range of non-
institutional care to patients in these markets. The Company believes this
system will facilitate managed care concepts and pricing in these markets, where
managed care currently has little penetration, and should prevent the
outmigration of the non-urban population to urban health care facilities and
service providers. The Company's revenues have grown from $18 million for the
fiscal year ended July 31, 1990 to $134 million for the fiscal year ended July
31, 1995.
Recent data suggests that there is a shortage of health care services in non-
urban markets. According to the United States Census Bureau, in 1990 non-urban
areas of the United States accounted for roughly 25% of the national population,
or approximately 62 million people. However, according to the American Medical
Association, just 11% of physicians, or approximately 75,000 physicians,
practice in non-metropolitan markets. This data indicates that rural markets are
underserved, and suggests that there may be opportunities for improvement in
access to primary care physicians, as well as specialty services. The Company
believes that these needs result in significant opportunities for companies such
as RoTech, which can attract, retain and network physicians in non-urban
settings while offering ancillary services such as home health care, to become a
full-service, non-institutional based primary health care provider.
OPERATING AND EXPANSION STRATEGY
RoTech was founded in 1981 to provide home respiratory and home medical
equipment products and services to patients in Florida. With its founders' roots
in pharmacy and pharmaceutical sales, the Company's marketing directive has
always been to consult with primary care physicians in utilizing home health
care techniques, products and services for their patient base. Counseling these
physicians as to disease management leads to earlier identification and
treatment of patients, enhancing the patient's quality of life and longevity.
The Company has not targeted specialists, as their patients are more acute and
since specialists have historically been tied to the hospital systems which
results in higher hospitalizations. RoTech's philosophy and practice is to
assist in identifying patients of primary care physicians prior to
hospitalization and prior to an acuity level that would require utilizing a
specialist.
3
The Company's strategy is to develop integrated health care delivery systems
through the acquisition of smaller local home health care companies and primary
care physician practices in non-urban areas. The Company targets non-urban
markets of smaller cities and rural areas, due to the dominance of primary care
physicians in these markets, reduced competition and a tendency to care for
patients in the home setting. The Company believes that acquisitions of home
health care companies will continue to expand the base of relationships with
primary care physicians in these markets. Primary care physicians in these
markets typically have long-standing relationships with loyal patient bases.
These physicians are usually solo practitioners and are the key decision makers
in the treatment of their patients. The Company believes that making home health
care products and services available to these physicians will result in better,
less expensive health care that provides an improved quality of life for the
patients and their caregivers in these communities.
RoTech expanded its strategy in 1994 to acquire primary care physician
practices in two specific markets, northern Mississippi and central Florida,
where it has strong market presence in its home health care business. The
Company believes that networking these acquired primary care physicians, who are
predominantly solo practitioners, will allow economies of scale, justification
for advanced equipment to be shared among physicians, and standardization of
protocols. The Company believes that assertive patient management at the primary
care level, which would include the use of home health care techniques, should
result in patient retention and higher quality of care. Aggregation of patient
lives under the treatment of these physicians who can comprehensively manage
patients is currently attractive to managed care entities and could eventually
enable the Company to provide a managed care product in non-urban America.
SALES AND MARKETING
RoTech believes that the sales and marketing skills of its employees have been
instrumental in its growth to date and are critical to its future success.
RoTech emphasizes to its employees the importance of patient base growth and
retention by providing quality service to physicians and their patients.
Approximately 28% of RoTech's employees are actively involved in sales and
marketing. The sales representatives employed by the Company include registered
or certified respiratory therapists, registered pharmacists and registered
nurses who market all of the Company's services and products and are responsible
for maintaining and expanding the Company's relationships with physicians,
targeting primary care physicians in non-urban areas.
RoTech provides formal marketing, training, product and service information
to all of its technical and sales personnel so they can communicate effectively
with physicians about the Company's services and products. These personnel are
instructed on methods of serving the physicians by counseling them on new
procedures and medical technologies. Each technical and sales person must attend
periodic seminars conducted on a Company-wide basis. The Company emphasizes the
cross-marketing of all its products to physicians with which its salespeople
have already developed professional relationships. The Company believes its
marketing approach allows the primary care physician to identify acute and
chronic patients earlier in the disease process. Treatment is done at the
primary care level and accordingly at less cost than the advanced treatment of
the disease by specialists or in a hospital setting.
4
REIMBURSEMENT FOR SERVICES
A substantial percentage of RoTech's revenue is attributable to third-party
payors, including private insurers, Medicare and, to a lesser extent, Medicaid.
The Company has substantial expertise at processing claims and continues to
create and improve systems to manage third-party reimbursements, to produce
clean claims and obtain timely reimbursements by third-party payors. The Company
has developed distinct billing and collection departments for Medicare and
Medicaid reimbursements and for private insurance company claims which are
supported by customized computer systems. These departments work closely with
reimbursement officers at branch locations and third-party payors and are
responsible for the review of patient coverage, the adequacy and timeliness of
documentation and the follow-up with third-party payors to expedite
reimbursement payments. Reimbursement from the Medicare program as a percentage
of RoTech's total operating revenue approximated 36% for fiscal 1992, 39% for
fiscal 1993, 35% for fiscal 1994 and 49% for fiscal 1995.
RoTech has achieved increased operating revenue in home respiratory and other
medical equipment operations despite increased regulation and certain
reimbursement reductions. While the increased regulation tends to reduce the
amount of reimbursement from government sources for individual cases, the
Company believes the continued increased regulation also benefits the Company by
reducing the competition from joint ventures and fee revenue sharing
arrangements, which the Company has historically avoided.
The Company's levels of operating revenue and profitability, like
of other health care companies, are affected by the continuing efforts of third-
party payors to contain or reduce the health care costs by lowering
reimbursement rates, increasing case management review of services and
negotiating reduced contract pricing. Home health care, which is generally less
costly to third-party payors than hospital-based care, has benefited from those
cost containment objectives. However, as expenditures in the home health care
market continue to grow, initiatives aimed at reducing the health care delivery
costs at non-hospital sites are increasing. Changes in reimbursement policies by
third-party payors, or the reduction in or elimination of such reimbursement
programs, could have a material adverse impact on the Company's revenues.
Various state and federal health reform initiatives may lead to additional
changes in reimbursement programs.
PRODUCTS AND SERVICES
HOME HEALTH CARE PRODUCTS AND SERVICES
HOME RESPIRATORY CARE AND OTHER HOME MEDICAL EQUIPMENT PRODUCTS AND SERVICES
----------------------------------------------------------------------------
RoTech provides a variety of home respiratory therapy products and
services on a monthly rental or sale basis. Home respiratory care and other home
medical equipment represented 66% of the Company's revenues for fiscal 1995.
RoTech focuses on serving patients of primary care physicians with chronic
pulmonary diseases in their pre-acute stages. Early identification and retention
of these patients at the primary care level reduces health care costs and should
improve the patient's quality of life. RoTech also enjoys patient retention
post-hospitalization at the patient's or physician's request and does not rely
on referrals of patients by hospital discharge planners or case managers.
Industry-wide home respiratory market revenues were approximately $1.6 billion
in 1993.
5
The Company's home respiratory care product line includes oxygen
concentrators, portable liquid oxygen systems, nebulizers, and ventilator care.
Oxygen concentrators extract oxygen from room air and generally provide the
least expensive supply of oxygen for patients who require a continuous supply of
oxygen, are not ambulatory and who do not require excessive flow rates. Liquid
oxygen systems store oxygen under pressure in a liquid form. The liquid oxygen
is stored in a stationary unit that can be refilled at the patient's home and
can be used to fill a portable device that permits greatly enhanced patient
mobility. Nebulizers are devices which aerosolize medications, allowing them to
be inhaled directly into the patient's lungs. Ventilator therapy is used for the
individual that suffers from respiratory failure by mechanically assisting the
individual to breathe. The Company provides technicians who deliver and/or
install the respiratory care equipment, instruct the patient in its use, refill
the high pressure and liquid oxygen systems as necessary and provide continuing
maintenance of the equipment.
RoTech provides a full line of equipment and supplies of home medical
equipment and supplies for convalescents, including custom pieces required for
rehabilitation patients. Provision of home medical equipment enables the Company
to provide a "one-stop shopping" presence in its non-urban markets, which is
required for full patient service satisfaction. These products are provided on a
monthly rental or sale basis and include wheelchairs, hospital beds, walkers,
patient lifts, orthopedic supplies, catheters, syringes and bathroom aids.
HOME INFUSION THERAPY
---------------------
Home infusion therapy involves the administration of antibiotics, nutrients or
other medications intravenously, intramuscularly, subcutaneously or through a
feeding tube. The Company focuses on providing home infusion therapy to patients
prior to or in lieu of hospitalization, which generally offers significant cost
savings and preferable logistics for patients, their families and caregivers
over hospital-based treatments. RoTech believes that its marketing methods of
consulting with primary care physicians on home infusion therapies and the
continuing evolution of related technological advances should enable further
growth of this portion of the business. Focus on the referring primary care
physician facilitates the identification of patients requiring sub-acute
antibiotic treatments, which constitute 39% of the home infusion therapy market.
Home infusion therapies accounted for 25% of RoTech's revenues for fiscal 1995,
which includes the following types and approximate percentage mix of therapies
for the same period:
Antibiotic Therapy, 72% of home infusion therapy revenues. Antibiotic therapy
------------------
requires the infusion of antibiotic drugs into the patient's bloodstream to
treat infections and diseases, such as osteomyelitis (bone infections),
bacterial endocarditis (infection of the lining around the heart), wound
infections, infections associated with HIV/AIDS, and infections of the kidneys
and urinary tract. Antibiotics are generally believed to be more effective when
infused directly into the bloodstream than when taken orally. These treatments
can be prescribed by primary care physicians, are short-term in nature and recur
occasionally.
Enteral Nutrition Therapy, 12% of home infusion therapy revenues. Enteral
-------------------------
nutrition therapy is administered to patients who cannot eat as a result of an
obstruction to the upper gastrointestinal tract or because they are otherwise
unable to be fed orally. As with total parenteral nutrition therapy, enteral
nutrition therapy is often administered over a long period.
6
Pain Management and Chemotherapy, 6% of home infusion therapy revenues. Pain
--------------------------------
management therapy is the administration of pain controlling drugs to terminally
or chronically ill patients and is often administered in conjunction with
intravenous chemotherapy. Chemotherapy is the continuous or intermittent
intravenous administration of anti-cancer drugs. Chemotherapy generally is
administered periodically for several weeks or months.
Total Parenteral Nutrition Therapy, 5% of home infusion therapy revenues.
----------------------------------
Total parenteral nutrition (TPN) therapy involves the intravenous feeding of
nutrients to patients with impaired digestive tracts due to gastrointestinal
illnesses or conditions, due to underlying conditions including cancer or
HIV/AIDS. TPN is usually longer in duration than other forms of infusion
therapy, and can be lifelong.
Other Therapies. Other therapies and services include therapies such as
---------------
congestive heart failure therapy, hydration therapy and related nursing
services.
The Company's home infusion therapy business is dependent in large measure
upon physicians continuing to prescribe the administration of drugs and
nutrients through intravenous and other infusion methods. Orally administered
drugs and alternative drug delivery systems may have an effect upon the demand
for certain infusion therapies. The Company can predict neither the ultimate
impact of these treatments on the Company's business nor the nature of future
medical advances or their eventual impact on the Company's business.
PRIMARY CARE PHYSICIANS PRACTICES
RoTech believes that acquisitions of primary care physician practices in its
service areas present substantial opportunities. The Company believes that it
will be able to increase the profitability of the individual practices through
economies of scale and greater efficiencies, and that its centralized billing
and reimbursement functions will typically result in lower costs per claim and
quicker reimbursement. Based upon its many years of marketing to primary care
physicians, RoTech believes that the additional training and responsibility of
certain key personnel in a practice, typically a nurse, result in more
efficiency and allow physicians to spend more time practicing medicine. Not only
does this increased efficiency boost profitability, it also usually results in
greater physician satisfaction. In a medical practice owned by RoTech, RoTech
has the opportunity to instill the philosophy of patient retention whereby
primary care physicians can help patients maintain control over their health
care expenditures. The Company believes this increases the profitability of the
primary care physician practice and reduces the total amount of money spent to
treat a patient with no reduction in the overall level of care. RoTech currently
provides home health care products and services to the patients of more than
2,000 primary care physicians. The Company believes that many of these
physicians could ultimately become part of RoTech through its acquisitions of
such practices. Physician practices currently represent approximately 9% of the
Company's revenues.
RoTech has been a proponent of physician independence and autonomy through its
long-standing marketing to primary care physicians. This position is counter to
the role of the hospitals and managed care organizations who have historically
served to limit access and reimbursement of these physicians. By partnering with
RoTech, primary care physicians are able to obtain purchasing power,
administrative services, management, information systems and capital for
expanded staffing needed to service a larger patient base and improve the
medical practice and quality of life of the physician. As RoTech creates
networks of primary care physicians in these non-urban markets, additional
services
7
can be justified and facilitated such as introduction of specialists
(pulmonologist, cardiologist, oncologist, or obstetrician) or mobile diagnostic
equipment. The Company expects that these specialists will serve to educate,
support and consult with the primary care physician; will be salaried,
contracted or possibly capitated; and will provide hands-on treatment of more
complex cases. The expected economies of scale and information systems strength
will result in a better, more cost effective system for disease management,
including early detection and treatment, preventive care and wellness programs.
GOVERNMENT REGULATION
The home care industry is subject to extensive government regulation at the
federal level through the Medicare program and at the state level through the
Medicaid program. Medicare is a federally funded health insurance program which
provides health insurance coverage for persons age 65 and older and certain
disabled persons, and generally provides reimbursement at specified rates for
sales and rentals of specified medical equipment and supplies, provided such
equipment and supplies are determined to be medically necessary by the treating
physician. Medicaid is a health insurance program administered by state
governments which provides reimbursements for health care for certain
financially or medically needy persons regardless of age.
The Company is subject to government audits of its Medicare and Medicaid
reimbursement claims and has not, to date, experienced any material loss as a
result of any such government audits. Under existing federal law, the knowing
and willful offer or payment of any remuneration (including any kickback, bribe
or rebate) of any kind to another person to induce the referral of Medicare or
Medicaid beneficiaries for whom medical supplies and services may be reimbursed
by the Medicare or Medicaid programs is prohibited and could subject the parties
to such an arrangement to substantial criminal and civil penalties, including
exclusion from participation in these programs, for Medicare or Medicaid fraud.
The Office of Inspector General of the Department of Health and Human Services
("OIG") has promulgated regulatory "safe harbors" that describe certain
practices and business arrangements that comply with Medicare and Medicaid
regulations. The OIG and law enforcement authorities have recently increased
their investigatory efforts to determine whether various business practices
constitute remuneration for, or to induce, referrals. Certain states have also
passed statutes and regulations that prohibit payments for referral of patients.
These laws vary significantly from state to state. The result of legislative
and regulatory efforts is a challenging compliance situation. The Company has
been made aware that the OIG has made certain informal inquiries related to
payments received by the Company in the late 1980's. The OIG submitted its
findings to the United States Attorney for the Middle District of Florida, which
has elected to file a civil suit, Case No. 95-558-CIV-ORL-18, in which it is
contended that Medicare made some unspecified amount of payments to the Company
by mistake in part of 1987, 1988, and 1989. The civil suit seeks repayment of
the monies allegedly paid by mistake. While the Company is confident that it
was at all times in compliance with all material Medicare requirements, and
believes that all payments it received were made correctly and not by mistake,
the Company seeks an amicable resolution of the issues involved in the civil
suit in order to save time and potential litigation expenses. However, if the
matter is not amicably resolved, the Company intends to mount a vigorous
defense. The potential financial exposure of the Company in the civil suit is
unknown.
The types of services and products delivered by the Company, the required
quality of such services and products and the manner in which such services and
products are delivered and billed are each subject to significant and complex
regulations promulgated, interpreted and administered by the appropriate federal
or state governmental agency. Although the Company believes that its products,
8
services and procedures comply in all respects with such regulations applicable
to reimbursement eligibility, the unavailability of advance formal
administrative rulings in most regulated areas subjects the Company to possible
subsequent adverse interpretations and rulings which may affect the eligibility
of some or all of the Company's services and products for reimbursement. Such an
adverse interpretation or ruling could have a substantial adverse impact on the
Company's business.
In addition, the Company is required to obtain federal and state licenses and
permits relating to the distribution of pharmaceutical products, including a
federal Controlled Dangerous Substance Registration Certificate and Florida
State Wholesaler License. The Company is required to obtain similar licenses
from each state in which it does business.
The Company's acquisitions of primary care physician practices are structured
to attempt to comply with federal and state law restrictions on business
relationships between the Company and persons who may be in a position to refer
patients to the Company for the provision of health care related items or
services. Accordingly, the Company endeavors to undertake such acquisitions in a
manner where the consideration offered and paid is consistent with fair market
value in arms-length transactions and is not determined in a manner that takes
into account the volume or value of any referrals or business that might
otherwise be generated between the Company and the physician whose practice to
be acquired and for which payment may be made under Medicare or Medicaid. While
the Company believes that its acquisitions do not entail any form of unlawful
remuneration, there can be no assurances that enforcement authorities will not
attempt to construe the consideration exchanged in certain acquisition
transactions as entailing unlawful remuneration and to challenge such
transactions on such basis.
In many states, the "corporate practice of medicine doctrine" prohibits
business corporations from providing, or holding themselves out as providers of,
medical care through the employment of physicians. Although the two states in
which the Company has acquired practices of primary care physicians, Florida and
Mississippi, have not adopted this prohibition, there can be no assurance that
either state will not adopt this doctrine in the future or that the Company will
not acquire a primary care medical practice in a state that has enacted or
adopted through case law the corporate practice of medicine doctrine. While the
Company intends to structure future acquisitions to comply with the corporate
practice of medicine doctrine where it exists, there can be no assurance that,
given varying and uncertain interpretations of such laws, the Company would be
found to be in compliance with restrictions on the corporate practice of
medicine in all states. Enforcement of such doctrine could require divestiture
of acquired practices or restructuring of physician relationships.
Health care is an area of extensive and dynamic regulatory change. Changes in
the law or new interpretations of existing laws can have a dramatic effect on
permissible activities, the relative costs associated with doing business, and
the amount of reimbursement by government and third-party payors. The Omnibus
Budget Reconciliation Act of 1987 ("OBRA 1987") created six categories of
durable medical equipment for purposes of reimbursement under the Medicare Part
B program. There is a separate fee schedule for each category. OBRA 1987 also
controls whether durable medical equipment products will be paid for on a rental
or sale basis and established fixed payment rates for oxygen service as well as
a 15-month rental ceiling on certain medical equipment. An interim final rule
implementing the payment methodology under the fee schedules was published in
the Federal Register. Payment based on the fee schedules is effective with
covered items furnished on or after January 1, 1989. Generally, Medicare pays
80% of the lower of the supplier's actual charge for the item or the fee
schedule amount, after adjustment for the annual deductible amount. OBRA 1990
made changes to Medicare Part B reimbursement that were implemented in 1991. The
substantive change
9
was the standardization of Medicare rates for certain equipment categories. Laws
and regulations often are adopted to regulate new products, services and
industries. There can be no assurances that either the states or the federal
government will not impose additional regulations upon the Company's activities
which might adversely affect the Company's business.
Political, economic and regulatory influences are subjecting the health care
industry in the United States to fundamental change. Although Congress has
failed to pass comprehensive health care reform legislation thus far, the
Company anticipates that Congress and state legislatures will continue to review
and assess alternative health care delivery and payment systems and may in the
future propose and adopt legislation effecting fundamental changes in the health
care delivery system and in the amount and circumstance under which federally
funded payments such as Medicare and Medicaid are made. Legislative debate is
expected to continue in the future, and the Company cannot predict what impact
the adoption of any federal or state health care reform measures or future
private sector reform may have on its industry or business.
Pursuant to federal legislation commonly known as "Stark II" enacted as
part of The Omnibus Budget Reconciliation Act of 1993, and effective January 1,
1995, physicians are prohibited from making referrals to entities in which they
(or immediate family members) have an investment interest or compensation
arrangement, where such referral is for any "designated health service"
covered by Medicare/Medicaid, including parenteral and enteral nutrients,
equipment and supplies, and home health services. Ownership by a physician of
investment securities in a publicly-held corporation with stockholders' equity
exceeding $75 million at the end of the corporation's most recent fiscal year or
on average during the previous three fiscal years is exempt from the investment
prohibition if the securities are traded on the New York, American or a regional
stock exchange, or The Nasdaq National Market. Exemptions from the compensation
arrangement prohibition include (i) amounts paid by an employer to a physician
pursuant to a bona fide employment relationship meeting specified requirements,
including payments being unrelated to referrals and consistent with the fair
market value of the services provided and (ii) other personal service
arrangements if certain requirements are met, including that compensation be
paid over the term of a written agreement with a term of one year or more, be
set in advance, not exceed fair market value, and be unrelated to referrals.
While RoTech intends to structure its acquisitions and operations to comply with
Stark II, there can be no assurance that future interpretations of that law will
not require structural and organizational modifications of the Company's
existing relationships with physicians, nor can assurance be given that present
or future relationships between the Company and physicians will be found to be
in compliance with such law.
INSURANCE
In recent years, participants in the health care market have become subject to
an increasing number of malpractice and product liability lawsuits, many of
which involve large claims and significant defense costs. As a result of the
liability risks inherent in the Company's lines of business, including the risk
of liability due to the negligence of physicians or other health care
professionals employed by or otherwise under contract to the Company, the
Company maintains liability insurance intended to cover such claims. There can
be no assurance that the coverage limits of the Company's insurance policies
will be adequate, or that the Company can obtain liability insurance in the
future on acceptable terms or at all.
The Company currently has in force general liability and products liability
insurance policies, with coverage limits of $2.0 million per occurrence and in
the aggregate annually (with a deductible of
10
$25,000 per occurrence, and a deductible aggregate of $125,000). The Company
also has in force a professional liability insurance policy, with a coverage
limit of $1.0 million per occurrence and $3.0 million in the aggregate annually.
The Company has in force, with respect to physicians employed by the Company,
individual professional liability insurance policies, with coverage limits
ranging from $250,000 per occurrence to $1 million per occurrence, and ranges
from $750,000 in the aggregate annually to $3 million in the aggregate annually.
The Company's insurance policies are subject to annual renewal.
ITEM 2. PROPERTIES
-------------------
The Company leases all of its offices and facilities. The Company's
corporate headquarters is currently located in a 25,300 square foot
warehouse/office building located at 4506 L.B. McLeod Road, Suite F, Orlando,
Florida, 32811, leased by the Company for a 5 year period ending September 30,
2000 at a current rate of $3.40 per square foot with utilities, taxes and
insurance being the financial responsibility of the Company.
In addition to its corporate headquarters, the Company leases office
facilities in its 225 locations. These facilities are primarily used for general
office work and the dispatching of registered respiratory therapists, registered
nurses, registered pharmacists and delivery personnel. From the above locations,
the Company operates 34 pharmacies. The Company will consider opening additional
pharmacies as business in each area dictates.
The Company's office facilities vary in size from approximately 200 to
6,000 square feet. The total space leased for these offices is approximately
750,000 square feet at an average price of $6 per square foot. All of such
office space is leased pursuant to cancelable operating leases.
Management believes that its office and warehouse facilities are suitable
and adequate for its planned needs.
ITEM 3. LEGAL PROCEEDINGS
--------------------------
No material legal proceedings are pending to which the Company or any of its
subsidiaries is a party, or of which any of their property is subject, nor
to the Company's knowledge, are any such legal proceedings threatened,
except as discussed under the heading "Government Regulation" contained herein.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this Report.
PART II
-------
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
--------------------------------------------------------------------------
MATTERS
-------
The information required by this item is set forth under the heading "Prices of
Common Stock" on page 29 of the Company's Annual Report to Shareholders for the
fiscal year ended July 31, 1995, and is hereby incorporated by reference.
11
ITEM 6. SELECTED FINANCIAL DATA
--------------------------------
The information required by this item is set forth under the heading "Selected
Consolidated Financial Data" on page 24 of the Company's Annual Report to
Shareholders for the fiscal year ended July 31, 1995, and is hereby incorporated
by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATION
------------
RESULTS OF OPERATIONS
The following table presents certain statement of income data as a percentage of
certain items relative to total operating revenue:
[Download Table]
Year Ended July 31
-----------------------------
1995 1994 1993
------- ------- -----------
OPERATING REVENUE:
Home respiratory and other medical equipment 66.3% 58.1% 49.3%
Home infusion therapy 25.0 35.7 44.9
Physician practices 8.7 6.2 5.8
------ ------ ---------
Total Operating Revenue 100.00% 100.00% 100.00%
COST AND EXPENSES:
Cost of revenue 27.1 24.4 25.5
Selling, general and administrative 49.6 50.2 51.8
Depreciation and amortization 7.1 7.5 5.8
Interest 0.6 0.1 0.2
------ ------ ---------
Total Cost and Expenses 84.4 82.2 83.3
------ ------ ---------
Income before income taxes 15.6 17.8 16.7
Income tax expense 5.8 6.5 6.1
------ ------ ---------
Net Income 9.8% 11.3% 10.6%
====== ====== =========
FOR THE FISCAL YEARS ENDED JULY 31, 1995 AND 1994
-------------------------------------------------
Operating revenue increased 87.6% to $134.1 million for the fiscal year ended
July 31, 1995 ("fiscal 1995") from $71.5 million for the fiscal year ended July
31, 1994 ("fiscal 1994"). The increase in operating revenue is attributable to
acquisitions and expanded product and service lines in existing areas of
operation. The Company continues to employ a single sales force to maintain and
develop both the home respiratory and other medical equipment and home infusion
therapy and other pharmacy related lines of business.
Operating revenue from home respiratory and other medical equipment increased
113.7% to $88.8 million for fiscal 1995 from $41.6 million for fiscal 1994. The
increase was due mainly to increases in patient bases throughout the Company's
locations and increased marketing efforts in certain locations acquired during
fiscal year 1994 and 1995.
Operating revenue from home infusion therapy and pharmacy related services
increased 31.6% to $33.6 million for fiscal 1995 from $25.5 million for fiscal
1994. Growth in this line of business should continue as the Company expands
both its service areas and available products and services.
12
Operating revenue from physician practices represented 8.7% of total operating
revenue for fiscal 1995, compared to less than 5% for fiscal 1994. The Company
currently owns 20 physician practices and employs 26 primary care physicians.
These practices are clustered in two rural marketplaces. Growth in this line of
business should continue yet decline as a percentage of operating revenue as the
Company continues to acquire mostly home health care operations.
Cost of revenue as a percentage of operating revenue increased to 27.1% for
fiscal 1995 from 24.4% for fiscal 1994 due to changes in the product mix in the
last year resulting from mid-year fiscal 1994 and fiscal 1995 acquisitions.
Selling, general and administrative expenses as a percentage of operating
revenue remained relatively stable at 49.6% for fiscal 1995, down from 50.2% for
fiscal 1994 as the revenue base has grown faster than the Company's costs.
Selling, general and administrative expenses included a net gain from the sale
of an other asset. The gain resulted from years of operational expenses flowing
through the income statements rather than being capitalized. The net gain was
offset by increased bad debt expense, resulting in no net impact on selling,
general and administrative expenses and no impact on earnings from the gain.
Management took the opportunity provided by the gain to improve its overall
long-term financial position. Changes in the Company's mix of business also
affect these categories. For example, physician practices have no cost of
revenue, and all expenses are of a selling, general and administrative nature.
Depreciation and amortization expense increased 79.2% to $9.6 million for
fiscal 1995 from $5.3 million for fiscal 1994. Depreciation and amortization
expense as a percentage of operating revenue was 7.1% for fiscal 1995 and 7.5%
for fiscal 1994. The dollar increase was attributable to the Company's purchase
of fixed and intangible assets resulting from various acquisitions and the fixed
assets needed for the increased rentals of equipment. All acquisitions in
fiscal 1995 were accounted for by the purchase method of accounting for
acquisitions.
Interest expense, net of interest income, increased to $835,000 for fiscal
1995 from $67,000 for fiscal 1994. This increase resulted from the Company
borrowing monies to fund certain acquisitions. The proceeds from the Company's
May 1995 stock offering were utilized to repay all bank indebtedness, yet due to
the acquisition pace, the company became a borrower again in early July 1995.
Income tax expense was provided at a 37.2% effective rate, compared to 36.5%
the prior fiscal year. The increase was due to the increase in non-deductible
amortization expense in fiscal 1995 and the entry into a higher tax bracket.
Net income for fiscal 1995 was $13.1 million, a 62.0% increase over the $8.1
million for fiscal 1994. Net income per share increased 28.3% to $1.27 for
fiscal 1995 compared to $0.99 for fiscal 1994. The weighted average number of
shares increased 26.9% to 10.3 million at July 31, 1995 from 8.1 million at July
31, 1994, primarily as a result of the March 1994 and May 1995 public stock
offerings and shares issued in conjunction with certain acquisitions.
FOR THE FISCAL YEARS ENDED JULY 31, 1994 AND 1993
-------------------------------------------------
Operating revenue for fiscal 1994 increased to $71.5 million from $48.4
million for the fiscal year ended July 31, 1993 ("fiscal 1993"). The 48%
increase in operating revenue is attributable primarily to the increase from 71
locations to 134 locations in fiscal 1994 with approximately one-third of the
increase resulting from the acquired home respiratory and other medical
equipment companies. The balance of the growth in operating revenue was from
existing locations, inclusion of fiscal 1993 acquisitions for a full year and
locations internally developed in fiscal 1994.
Operating revenue from home respiratory and other medical equipment grew 74%
to $41.6 million for fiscal 1994 from $23.9 million for fiscal 1993. This 74%
increase was due mainly to a continued focus of the Company's sales force toward
home respiratory products and services and acquisitions of companies
predominantly in this line of business.
13
Operating revenue from home infusion therapy increased 17% to $25.5 million
for fiscal 1994 from $21.7 million for fiscal 1993. The slower growth is due to
the fiscal 1994 direction of the Company's single sales force toward home
respiratory products and services, and unit growth in home infusion therapy
products and services in spite of some pricing pressures experienced during the
year.
Cost of revenue as a percentage of operating revenue decreased to 24.4% for
fiscal 1994 from 25.5% for fiscal 1993. The Company continued to obtain better
volume pricing with the addition of new entities and refocused its acquisition
efforts on the home respiratory and other medical equipment line of business,
which has a lower cost of revenue as a percentage of operating revenue. Selling,
general and administrative expenses as a percentage of operating revenue
decreased to 50.2% from 51.8% for the same two periods.
Depreciation and amortization expense increased 91% to $5.3 million for fiscal
1994 from $2.8 million for fiscal 1993, and increased as a percentage of
operating revenue during the same periods. This dollar increase is attributable
to the Company's purchases of fixed and intangible assets resulting from various
acquisitions and the fixed assets needed for the increased rentals of equipment.
Net interest expense decreased to $67,000 for fiscal 1994 from $76,000 for
fiscal 1993. This decrease resulted from the payment of outstanding debt
balances in March 1994 with proceeds from the public offering and lower interest
rates charged on borrowings from banks prior to March 1994. The decrease was
also due to the interest income earned on short-term investments.
The effective tax rate was 36.5% for fiscal 1994, compared to 36.6% for fiscal
1993.
As a result of the foregoing, net income increased 58% to $8.1 million from
$5.1 million and net income as a percentage of operating revenue increased to
11.3% for fiscal 1994 from 10.6% for fiscal 1993.
The Company was required to adopt Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes," in the first quarter of fiscal 1994 as
more fully described in Note 1 of the consolidated financial statements.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
At July 31, 1995, total current assets were $56.7 million and total current
liabilities were $18.8 million, resulting in working capital of $37.9 million.
The Company's current ratio was 3.01 to 1 at July 31, 1995 compared to 3.68 to 1
at July 31, 1994. Net trade accounts receivable increased $12.7 million in
fiscal 1995, or 42.8%. This increase is attributable to acquisitions of the net
assets of many home health care companies during the year and the 87.6% increase
in operating revenue over the prior year. As a result, the Company's days
revenue outstanding on net accounts receivable decreased to 98 days at July 31,
1995 from 116 days at July 31, 1994. Acquired receivables remaining outstanding
account for approximately 10 days revenue outstanding at July 31, 1995 and 21
days revenue outstanding at July 31, 1994.
Current liabilities increased $8.5 million in fiscal 1995, or 81.8%, as $10.0
million was borrowed on the working capital line of credit. The balance of the
change was due to the timing of payments to vendors.
14
During fiscal 1995, the Company generated cash of $17.1 million from operating
activities primarily as a result of net income of $13.1 million along with non-
cash expenses of $11.7 million. Advances on the working capital line of credit
were utilized to fund acquisitions and internal expansion. During fiscal 1995,
the Company spent $55.6 million to acquire various home health care companies
and $17.3 million to purchase property and equipment, primarily rental
equipment, for operational needs. The Company has been financing its revenue
growth and increased working capital requirements with positive net cash
provided by operating activities and short-term borrowings.
As of July 31, 1995, the Company had a working capital line of credit of $75.0
million, with approximately $65.0 million available for future borrowing. The
working capital and acquisition line of credit carries a negative pledge on all
Company assets, is payable on demand and provides for interest rates, at the
Company's election, of LIBOR plus .70% or prime rate minus 1% for the first
$20.0 million advanced to the Company and LIBOR plus .825% or prime rate minus
1% for any advances in excess of the first $20.0 million. The line of credit
requires compliance by the Company with certain financial and negative
covenants, including a restriction on dividends. Management believes that its
credit capacity and cash flow from operations, will be sufficient for the
Company's projected growth in the near future.
The Company completed a public offering in May of 1995 in which it issued an
additional 1.7 million shares for cash of $49.9 million, compared with its March
1994 public offering of 2.0 million shares which provided cash of $36.7
million.
For fiscal 1994, the Company's operating activities provided $4.8 million in
cash, compared to $1.6 million in fiscal 1993. The primary component of this
change was an increase in net income to $8.1 million for fiscal 1994, compared
to $5.1 million for fiscal 1993, offset by increased accounts receivable and
decreased amounts payable on operating liabilities. The Company has generated
positive net cash flow from operating activities in each of its last six fiscal
years despite increases in accounts receivable in each period resulting from the
similar growth in operating revenue.
During fiscal 1994, investing activities used $47.1 million in cash, compared
to $6.4 million during fiscal 1993. During fiscal 1994, the Company spent $9.4
million to purchase property and equipment, primarily rental equipment, for
operations and general equipment needs, compared to $4.0 million in fiscal 1993.
Purchases of property and equipment typically represent the major component of
the Company's investing activities. The Company paid $38.6 million to acquire
various home health care companies in fiscal 1994. Aside from increased
purchases of home respiratory and other medical equipment to support its sales
growth in its home respiratory and other medical equipment operations, the
Company does not require significant fixed capital investment.
Financing activities provided $40.0 million in cash during fiscal 1994,
compared to $7.2 million during fiscal 1993. The Company's strategy has been to
use net cash flow from operations and borrowings to finance expansion of its
business. The Company was able to complete an equity offering and repay all
borrowings with a portion of the proceeds to enable the same strategy to
continue for fiscal 1994.
15
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------
Financial Statements
--------------------
The information required by this item is set forth on pages 4 through 22 in the
Company's Annual Report to Shareholders for the fiscal year ended July 31, 1995,
and is hereby incorporated by reference.
Selected Quarterly Consolidated Financial Data
----------------------------------------------
The supplementary financial information is set forth on page 29 of the Company's
Annual Report to Shareholders for the fiscal year ended July 31, 1995, and is
hereby incorporated by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
-----------------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------
On June 7, 1994, the Company dismissed Ernst & Young LLP as its independent
accountants and engaged Deloitte & Touche LLP as its new independent
accountants. The change was reported in a Current Report on Form 8-K dated June
10, 1994.
PART III
--------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------------------------------
Information concerning Directors and Executive Officers of the Registrant is
incorporated herein by reference to the Company's definitive proxy statement
dated November 8, 1995 for the annual meeting of shareholders to be held on
December 8, 1995, pages 3 and 4, "ELECTION OF DIRECTORS". Such definitive proxy
statement will be filed with the Securities and Exchange Commission no later
than October 28, 1995.
ITEM 11. EXECUTIVE COMPENSATION
--------------------------------
Information concerning executive compensation is incorporated herein by
reference to the Company's definitive proxy statement dated November 8, 1995 for
the annual meeting of shareholders to be held on December 8, 1995, page 4,
"Executive Compensation," and page 5, "Key Man Life Insurance." Such definitive
proxy statement will be filed with the Securities and Exchange Commission no
later than October 28, 1995.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
------------------------------------------------------------------------
Information concerning security ownership of certain beneficial owners and
management is incorporated herein by reference to the Company's definitive proxy
statement dated November 8, 1995 for the annual meeting of shareholders to be
held on December 8, 1995, pages 1 and 2, "PRINCIPAL HOLDERS OF VOTING
SECURITIES". Such definitive proxy statement will be filed with the Securities
and Exchange Commission no later than October 28, 1995.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------
Information concerning certain relationships and related transactions is
incorporated herein by reference to the Company's definitive proxy statement
dated November 8, 1995 for the annual meeting of shareholders to be held on
December 8, 1995, page 5, "Certain Related Transactions". Such definitive proxy
statement will be filed with the Securities and Exchange Commission no later
than October 28, 1995.
16
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
--------------------------------------------------------------------------
(a) Documents filed as part of this report:
1. Financial Statements. The audited consolidated balance sheets of the
--------------------
Registrant and subsidiaries as of July 31, 1995 and July 31, 1994,
and the related consolidated statements of income, changes in
stockholders' equity and cash flows of the Registrant and
subsidiaries for the three fiscal years ended July 31, 1995, are set
forth on pages 4 through 21 of the Registrant's Annual Report to
Shareholders for the fiscal year ended July 31, 1995, which
statements are incorporated in this report by reference.
2. Financial Statement Schedules. The following Financial Statement
-----------------------------
Scheule for years ended July 31, 1995, 1994 and 1993 is set forth
under the heading "Financial Statement Schedule" on page 21 of the
Company's Annual Report to Shareholders for the fiscal year ended
July 31, 1995 and is hereby incorporated by reference.
Schedule II Valuation and
Qualifying Accounts
for the fiscal years
ended July 31, 1995,
1994 and 1993
All other schedules are omitted because they are not required, are not
applicable, or the required information is included in the
Consolidated Financial Statements or notes thereto.
(a) 3. Exhibits. The exhibits filed as a part of this Report are listed in
--------
the attached Index to Exhibits.
(b) Reports on Form 8-K filed in the fourth quarter of fiscal 1995.
--------------------------------------------------------------
The Company filed a Current Report on Form 8-K dated June 20, 1995.
The Current Report discussed that the Registrant, through its wholly-owned
subsidiary, Distinct Home Health Care, Inc., acquired substantially all of the
assets of Marshall Bell, Ltd., a Texas-based partnership referred to as
"Marshall Bell, Ltd.," or "Seller") for $11.3 million cash and the issuance of
146,000 shares of restricted common stock valued at $2 million; that Marshall
Bell, Ltd., provides home health care products and services through its
locations in Texas, Louisiana, Mississippi and Arkansas; that the Registrant
intends to continue the business as acquired; that the Sellers had no material
relationship with the Registrant prior to the acquisition; that the purchase
price was paid from available cash on hand resulting from the May 1995 secondary
public offering in which the Registrant raised approximately $49.9 million; that
the price was based on comparable purchases in the home health care industry,
type and timing of consideration to be paid and arms-length negotiations between
the two parties.
17
Index to Exhibits
Except as otherwise indicated, the following Exhibits are incorporated by
reference as a part of this Report on Form 10-K:
[Enlarge/Download Table]
Exhibit Sequentially Numbered
Number Description Page
------- ----------- --------------------------
3.1 Articles of Incorporation of RoTech Medical Corporation (F/K/A Southern Oxygen Systems,
Inc.) filed with the Florida Department of State on September 1, 1981. (Incorporated
by reference to Exhibit 3.1 to the Company's Registration Statement No. 33-8711 on Form
S-1).
3.2 Amendment to Articles of Incorporation of Southern Oxygen Systems, Inc., changing its
name to RoTech Medical Corporation and restating its Articles of Incorporation, filed
with the Florida Department of Sate on March 29, 1984. (Incorporated by reference to
Exhibit 3.2 to the Company's Registration Statement No. 33-8711 on Form S-1.)
3.3 Amendment to Articles of Incorporation of RoTech Medical Corporation, changing the
authorized capital stock to 1,500,000 shares of Common Stock having a par value of
$1.00 per share, filed with the Florida Department of State on June 13, 1984.
(Incorporated by reference to Exhibit 3.3 to the Company's Registration Statement No.
33-8711 of Form S-1.)
3.4 Amendment to Articles of Incorporation of RoTech Medical Corporation, changing the
authorized capital stock to 50,000,000 shares of Common Stock having a par value of
$.0002 per share, filed with the Florida Department of State on June 15, 1984.
(Incorporated by reference to Exhibit 3.4 to the Company's Registration Statement No.
33-8711 of Form S-1.)
3.5 By-Laws of RoTech Medical Corporation (F/K/A Southern Oxygen Systems, Inc.)
(Incorporated by reference to Exhibit 3.5 to the Company's Registration Statement No.
33-8711 of Form S-1.)
3.6 Amended and Restated By-Laws of RoTech Medical Corporation, as amended. (Incorporated
by reference to Exhibit 3.6 to the Company's Registration Statement No. 33-8711 of Form
S-1.)
4.1 Form of Stock Certificate. (Incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement No. 33-8711 of Form S-1.)
10.1 Form of Registrant's 1986 Incentive Stock Option Plan. (Incorporated by reference to
Exhibit 10.5 to the Company's Registration Statement No. 33-8711 of Form S-1.)
18
[Enlarge/Download Table]
10.2 First Amendment to Third Amendment and Restated Loan Agreement, dated June 1, 1995, by and
between RoTech Medical Corporation, its subsidiaries and SunBank, National Association,
reflecting one credit facility not to exceed $75,000,000, filed herewith.
10.3 Form of Registrant's Incentive Compensation Plan (Incorporated by reference to Exhibit 10.3
to the Company's Registration Statement No. 33-41097 of Form S-2.)
10.4 Form of Registrant's Restricted Stock Plan for Non-Employee Directors (Incorporated by
reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K for the fiscal
year ended July 31, 1992.)
10.5 Form of Registrant's July 9, 1993 Stock Option Plan, (Incorporated by reference to Exhibit
10.5 to the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1994.)
10.6 Form of Registrant's Amended Restricted Stock Plan for Non-Employee Directors, filed herewith.
13.1 Annual report to security holder.
22.1 Subsidiaries of Registrant, filed herewith.
27 Financial Data Schedule
99 Notice & Proxy Statement
19
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, RoTech Medical Corporation has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
ROTECH MEDICAL CORPORATION,
a Florida corporation
By: /s/ Stephen P. Griggs
-----------------------
Stephen P. Griggs,
President
Date: October 28, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
[Enlarge/Download Table]
SIGNATURE TITLE DATE
/s/ William P. Kennedy Chief Executive Officer; and Director October 28, 1995
---------------------------
WILLIAM P. KENNEDY
/s/ Stephen P. Griggs President, Assistant Secretary, October 28, 1995
--------------------------- Chief Operating Officer; and Director
STEPHEN P. GRIGGS
/s/ William A. Walker II Secretary, and Director October 28, 1995
---------------------------
WILLIAM A. WALKER
Director
--------------------------
JACK T. WEAVER
Director
--------------------------
LEONARD E.WILLIAMS
/s/ Rebecca R. Irish Treasurer; Assistant Secretary, October 28, 1995
-------------------------- Principal Financial and Accounting
REBECCA R. IRISH Officer; and Chief Financial Officer
20
Dates Referenced Herein and Documents Incorporated by Reference
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