Rotech Medical Corp – ‘10-K/A’ for 7/31/96

As of:  Friday, 11/8/96   ·   For:  7/31/96   ·   Accession #:  931763-96-861   ·   File #:  0-14003

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Amendment to Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K/A      Amend #1 to Form 10-K                                 20    114K 
 2: EX-10.2     Amended & Restated Revolving Credit                   80    307K 
 3: EX-13.1     Annual Report to Security Holders                     31    148K 

10-K/A   —   Amend #1 to Form 10-K
Document Table of Contents

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A 

[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, 1996                               

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)  

                                                                [Download Table]


                                                                                 
           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 non-        
affiliates of the Registrant, computed by reference to the last sale price per  
share, as of October 21, 1996, was $419,662,667.                                

On October 21, 1996, RoTech Medical Corporation had 25,434,101 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 9, 1996, are incorporated 
into Part III.                                                                  

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ROTECH MEDICAL CORPORATION  

FORM 10-K/A ANNUAL REPORT 

Fiscal Year Ended July 31, 1996 

                                                        [Enlarge/Download Table]


                                                                                        

PART I:                                                                             PAGE

Item 1   Business .................................................................  3  
Item 2   Properties ............................................................... 12  
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 .................................................. 13  
Item 7   Management's Discussion and Analysis of Financial Condition and                
         Results of Operations .................................................... 13  
Item 8   Financial Statements and Supplementary Data .............................. 16  
Item 9   Changes in and Disagreements with Accountants on Accounting and                
         Financial Disclosure ..................................................... 16  

ITEM 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  


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PART I  

ITEM 1.  BUSINESS                                                               
-----------------                                                               

GENERAL                                                                         

RoTech Medical Corporation ("RoTech" or the "Company") provides       
comprehensive home health care and primary care physician services, principally 
to patients in non-urban areas.  RoTech operated 366 home health care locations 
and 24 primary care physician practices, employing 29 physicians as of July 31, 
1996, and has subsequently acquired an additional 31 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 1996 acquisitions of 145 locations of smaller home health care companies 
and the opening of 20 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 $37 million for the   
fiscal year ended July 31, 1992 to $263 million for the fiscal year ended July  
31, 1996.                                                                       

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         

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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 primary care physicians to identify patients prior to hospitalization    
and prior to an acuity level that would require utilizing a specialist.         

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         

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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.                         

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     
fully and properly documented claims, and to 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 48% for
fiscal 1996, 49% for fiscal 1995, and 35% for fiscal 1994.                      

 RoTech has achieved increased operating revenue in home respiratory and
other medical equipment operations despite increased regulation and             
corresponding reimbursement reductions. While 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 of the Company,
like those of other health care companies, are affected by the continuing       
efforts of third-party payors to contain or reduce the costs of health care 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 benefitted from those
cost containment objectives. However, as expenditures in the home health care   
market continue to grow, initiatives aimed at reducing the costs of health care 
delivery 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.                                              

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PRODUCTS AND SERVICES                                                           

HOME HEALTH CARE PRODUCTS AND SERVICES                                          

HOME RESPIRATORY THERAPY AND EQUIPMENT                                      

RoTech provides a variety of home respiratory therapy products and    
services on a monthly rental or sale basis. Home respiratory therapy and        
equipment represented 42% of the Company's revenues for fiscal 1996. 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 the cost of health care and should   
improve the quality of life of the patients and their families. 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. Overall home respiratory market revenues were        
approximately $1.6 billion in 1993.                                             

The Company's home respiratory care product line includes oxygen      
concentrators, portable and home 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 easily 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 and caregivers in its use, refill the high pressure and    
liquid oxygen systems as necessary and provide continuing maintenance of the    
equipment.                                                                      

HOME MEDICAL EQUIPMENT AND SUPPLIES                                         

RoTech provides a full line of equipment and supplies of home medical 
equipment and supplies for convalescents, including custom pieces required for  
rehabilitation patients.  Home medical equipment and supplies represented 35% of
the Company's revenues for fiscal 1996. 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 AND OTHER PHARMACY RELATED PRODUCTS AND SERVICES      

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     

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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 16% of RoTech's revenues for      
fiscal 1996, which includes the following types:                                

 Antibiotic Therapy (The majority of the Company's 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--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.                                                

Pain Management and Chemotherapy--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--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.            

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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 practice revenue currently represents 
7% of the Company's total revenues.                                             

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

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regulatory efforts is an extra compliance challenge and, therefore, risk. The   
Company has been 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
elected in May, 1995, to file a civil suit, Case No. 95-558-CIV-ORL-18, in which
it contends that Medicare made some unspecified amount of payments to the       
Company for respiratory care services to certain Florida patients by mistake in 
part of 1987, in 1988, and in 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 Company received an inquiry from the Medicaid Department of the State
of Mississippi and subsequently received a subpoena from the OIG concerning the 
Company's 1994 cost report for its Mississippi Rural Health Clinics. The Company
is cooperating fully with such inquiries. There has been no statement of issues 
or particular concerns given the Company sufficient to permit the Company to    
determine the extent of financial exposure, if any. The Company is not aware of 
any material error in the one year's cost report under inquiry, following       
consultation with its outside consultant, who also assisted in the preparation  
and filing of the 1994 cost report. If any adjustments occur, such would likely 
relate only to Mississippi physician clinics for 1994.                          

   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,  
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  
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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 or another 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 
recently 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 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. Further, each area of medical care is subject to scrutiny 
and revision as to the amount of reimbursement which is reasonable. Any         

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reduction in reimbursement in those goods and services provided by the Company  
would have a direct effect on gross revenues of the Company. 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 various liability insurance policies,
with total coverage limits of $26 million in total limits for liabilities       
arising out of all operations, except employed physicians. These policies       
contain various levels of deductibles and self-insured retentions. They provide 
the Company protection against claims alleging bodily injury or property damage 
arising out of the Company's operations, including home health care, but        
excluding the Company's employed physicians. 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

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$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 and its subsidiaries
lease office facilities for its 389 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    
904,797 square feet at an average price of $8.54 per square foot. All of such   
office space is leased pursuant to operating leases.                            

   Management believes that its office and warehouse facilities are suitable
and adequate for its planned needs.                                             

ITEM 3.  LEGAL PROCEEDINGS                                                      
--------------------------                                                      

 The Company is from time to time involved in various legal proceedings.
Although the Company does not believe that any currently pending proceeding will
materially and adversely affect the Company, there can be no assurance that any 
current or future proceeding will not have a material adverse affect on the     
Company's financial position or results of operations.                          

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 30 of the Company's Annual Report to shareholders for the 
fiscal year ended July 31, 1996, and is hereby incorporated by reference.       

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ITEM 6.  SELECTED FINANCIAL DATA                                                
--------------------------------                                                

The information required by this item is set forth under the heading "Selected  
Consolidated Financial Data" on Page 25 of the Company's Annual Report to the   
Shareholders for the fiscal year ended July 31, 1996, 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 the percentage of certain items relative to total  
operating revenue:                                                              

                                                        [Enlarge/Download Table]


                                                               Year Ended July 31        
                                                            -------------------------    
                                                            1996      1995       1994    
                                                            ----      ----       ----    

                                                                                         
OPERATING REVENUE:                                                                       
  Home respiratory therapy and equipment ..................   41.9%     42.2%    58.1(a)%
  Home medical equipment and supplies .....................   35.0      24.1      (a)    
  Home infusion therapy and other pharmacy relate                                        
    products and services .................................   15.8      25.0     35.7    
  Physician practices .....................................    7.3       8.7      6.2    
                                                             -----     -----    -----    
Total Operating Revenue                                      100.0%    100.0%   100.0%   

COST AND EXPENSES:                                                                       
  Cost of revenue ........................................    27.0      27.1     24.4    
  Selling, general and administrative ....................    48.4      49.6     50.2    
  Depreciation and amortization ..........................    10.1       7.1      7.5    
  Interest ...............................................     2.0       0.6      0.1    
                                                             -----     -----    -----    
Total Cost and Expenses ..................................    87.5      84.4     82.2    
                                                             -----     -----    -----    
Income before income taxes ...............................    12.5      15.6     17.8    
Income tax expense .......................................     4.7       5.8      6.5    
                                                             -----     -----    -----    
Net Income ...............................................     7.8%      9.8%    11.3%   
                                                             =====     =====    =====    

----------                                                                      
(a) A breakout of home respiratory therapy and equipment revenues and home      
medical equipment and supplies as a percentage of total revenue was not 
    available for the year ended July 31, 1994. All revenue related to these two
product lines has been presented as "home respiratory therapy and       
equipment."                                                             

FOR THE FISCAL YEARS ENDED JULY 31, 1996 AND 1995                               

Operating revenue increased 96% to $263.0 million for the fiscal year 
ended July 31, 1996 ("fiscal 1996") from $134.1 million for the fiscal year     
ended July 31, 1995 ("fiscal 1995").  The increase in operating revenue is      
attributable to acquisitions and expanded product and service lines in existing 
areas of operation.  During fiscal 1996, the Company added 165 home care        
locations and operated 366 home care locations in 28 states as of July 31, 1996.
The Company continues to employ a single sales force to maintain and develop    
both the home respiratory therapy, other medical equipment, home infusion       
therapy and other pharmacy related lines of business.                           

 Operating revenue from home respiratory therapy and equipment increased
95% to $110.1 million for fiscal 1996 from $56.5 million for fiscal 1995.       
Operating revenue from home medical equipment and supplies increased 185% to    
$92.1 million for fiscal 1996 from $32.3 million for fiscal 1995. The increases 
in these two product lines were due mainly to increases in patient bases        

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throughout the Company's locations and increased marketing efforts in certain   
locations acquired during fiscal year 1995 and 1996. The majority of the        
Company's acquisitions are of businesses that operate primarily in these two    
product lines.                                                                  

    Operating revenue from home infusion therapy and pharmacy related services
increased 24% to $41.5 million for fiscal 1996 from $33.6 million for fiscal    
1995. Growth in this line of business should continue as the Company expands its
service areas.                                                                  

   Operating revenue from physician practices increased 65% to $19.4 million
for fiscal 1996, from $11.7 million for fiscal 1995. The Company currently owns 
24 physician practices and employs 29 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 home health care operations.                               

 Cost of revenue as a percentage of operating revenue decreased to 27.0%
for fiscal 1996 from 27.1% for fiscal 1995 due to changes in the product mix in 
the last year resulting from mid-year fiscal 1995 and fiscal 1996 acquisitions. 
Selling, general and administrative expenses as a percentage of operating       
revenue reduced to 48.4% for fiscal 1996 from 49.6% for fiscal 1995, as the     
revenue base has grown faster than the Company's costs. 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 177% to $26.5 million for
fiscal 1996 from $9.6 million for fiscal 1995. Depreciation and amortization    
expense as a percentage of operating revenue was 10.1% for fiscal 1996 and 7.1% 
for fiscal 1995. 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
1996 were accounted for by the purchase method for acquisitions.                

 Interest expense, net of interest income, increased to $5.2 million for
fiscal 1996 from $835,000 for fiscal 1995. This increase resulted from the      
Company borrowing monies to fund certain acquisitions along with the issuance of
the Convertible Subordinated Debentures on June 1, 1996.                        

Income tax expense was provided at a 37.5% effective rate, compared to
37.2% the prior fiscal 1995.                                                    

 Net income for fiscal 1996 was $20.6 million, a 56.4% increase over the
$13.1 million for fiscal year 1995.  Net income per share on a fully diluted    
basis increased 30.2% to $0.82 for fiscal 1996 compared to $0.63 for fiscal     
1995.  The weighted average number of shares on a fully diluted basis increased 
20.1% to 25.2 million at July 31, 1996 from 21.0 million at July 31, 1995,      
primarily as a result of the May 1995 public stock offering and shares issued in
conjunction with certain acquisitions.                                          

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 

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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 therapy and equipment and home
medical equipment and supplies 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.  The majority of
the Company's acquisitions are of businesses that operate primarily in these two
product lines.                                                                  

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.             

Operating revenue from physician practices represented 8.7% of total  
operating revenue for fiscal 1995, compared to 6.2% for fiscal 1994. At July 31,
1995 the Company owned 20 physician practices and employed 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%, 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 not cost of revenue and all expenses are  
of selling, general and administrative natures.                                 

   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.                                                                        

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 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 on a fully diluted basis    
increased 26% to $0.63 for fiscal 1995 compared to $0.50 for fiscal 1994.  The  
weighted average number of shares on fully diluted basis increased 28.8% to 21.0
million on July 31, 1995 from 16.3 million at July 1994, primarily as a result  
of the March 1994 and May 1995 public stock offerings and shares issued in      
conjunction with certain acquisitions.                                          

LIQUIDITY AND CAPITAL RESOURCES                                                 

At July 31, 1996, total current assets were $112.5 million and total  
current liabilities were $76.5 million, resulting in working capital of $36.0   
million.  The Company's current ratio was 1.47 to 1 at July 31, 1996 compared to
3.20 to 1 at July 31, 1995.  Net trade accounts receivable increased $41.2      
million in fiscal 1996, or 98%.  This increase is attributable to acquisitions  
of the net assets of many home health care companies during the year and the 96%
increase in operating revenue over the prior year.  As a result, the Company's  
days revenue outstanding on net accounts receivable decreased to 92 days at July
31, 1996 from 98 days at July 31, 1995.  Acquired receivables remaining         
outstanding account for approximately 16 days revenue outstanding at July 31,   
1996 compared to 10 days revenue outstanding at July 31, 1995.                  

 Current liabilities increased $57.6 million in fiscal 1996, or 305%, as
an additional $42 million was borrowed on the syndicated bank line of credit.   
The balance of the change was due to the timing of payments to vendors.         

During fiscal 1996, the Company generated cash of $37.5 million from  
operating activities primarily as a result of net income of $20.6 million along 
with non-cash expenses of $31.4 million.  Advances on the syndicated bank line  
of credit were utilized to fund acquisitions and internal expansion.  During    
fiscal 1996, the Company spent $146.6 million to acquire various home health    
care companies and $29.6 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.                     

On June 1, 1996, the Company issued $110,000,000 aggregate principal  
amount of 5 1/4% Convertible Subordinated Debentures ("Debentures").  Upon      
receipt, the proceeds were used to reduce the syndicated bank line of credit.   
The Debentures are due 2003 with interest payable on June 1 and December 1,     
commencing December 1, 1996. The debentures do not provide for a sinking fund.  
The Debentures are convertible into Common Stock of the Company at any time     
after the 60th day following the date of original issuance of the Debentures and
at or before maturity at a conversion price of $26.25 per share, subject to     
adjustment in certain events, plus accrued interest.  The Debentures are        
redeemable at the option of the Company, in whole or in part, but not before    
June 4, 1999.  The Company's ability to repurchase the Debentures is dependent  
upon the Company's having sufficient funds and may be limited by the terms of   
the Company's senior indebtedness or the subordination provisions of the related
indenture.                                                                      

  As of July 31, 1996, the Company had a syndicated bank line of credit of
$200 million, with approximately $127.6 million available for future            
borrowing, as of October 21, 1996.  The syndicated bank 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 a Bankers'     
Acceptance rate plus 0.75%.  The syndicated bank line of credit requires        
compliance by the Company with certain financial and negative covenants,        
including a restriction on dividends. As of July 31, 1996 the Company was in    
compliance with all covenants contained in the credit facility. Management      
believes that its credit capacity and cash flow from operations, will be        
sufficient for the Company's projected growth in the near future.               

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                            
----------------------------------------------------                            

Financial Statements:                                                           
---------------------                                                           

The information required by this item is set forth on page 1 through 31 in the  
Company's Annual Report to Shareholders for the fiscal year ended July 31, 1996,
and is hereby incorporated by reference.                                        

Selected Quarterly Consolidated Financial Data:                                 
-----------------------------------------------                                 

The supplementary financial information is set forth on page 30 on the Company's
Annual Report to Shareholders for the fiscal year ended July 31, 1996, and is   
hereby incorporated by reference.                                               

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND         
-----------------------------------------------------------------------         
FINANCIAL DISCLOSURE                                            
--------------------                                            

Not Applicable                                                                  

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, 1996 for the annual meeting of shareholders to be held on     
December 9, 1996, pages 3 and 4, "ELECTION OF DIRECTORS".  Such definitive      
proxy statement will be filed with the Securities and Exchange Commission no    
later than November 8, 1996.                                                    

ITEM 11.  EXECUTIVE COMPENSATION                                                
--------------------------------                                                

Information concerning executive compensation is incorporated herein by         
reference to the Company's definitive proxy statement dated November 8, 1996 for
the annual meeting of shareholders to be held on December 9, 1996, 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 November 8, 1996.                                      

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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, 1996 for the annual meeting of shareholders to be   
held on December 9, 1996, 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 November 8, 1996.                         

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, 1996 for the annual meeting of shareholders to be held on     
December 9, 1996, page 5, "Certain Related Transactions".  Such definitive proxy
statement will be filed with the Securities and Exchange Commission no later    
than November 8, 1996.                                                          

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, 1996 and July 31,
       1995, 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, 1996, are set forth on pages
  1 through 31 of the Registrant's Annual Report to Shareholders
 for the fiscal year ended July 31, 1996, which statements are
incorporated in this report by reference.                   

 2.  Financial Statement Schedules.  The following Financial Statement
       Schedule for the fiscal years ended July 31, 1996, 1995 and 1994 is
         set forth under the heading "Financial Statement Schedule" on page 23
      of the Company's Annual Report to Shareholders for the fiscal year
ended July 31, 1996 and is hereby incorporated by reference.

Schedule II   Valuation and Qualifying Accounts             
   for the fiscal years ended July 31,
1996, 1995 and 1994             

      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 1996.            
--------------------------------------------------------------        

The Company filed a Current Report on Form 8-K dated May 7, 1996. The 
Current Report discussed that the Registrant, through itself and its wholly-    
owned subsidiaries purchased an aggregate of individually insignificant         
businesses, as                                                                  

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defined per Regulation S-X Rule 3-05.  The individually insignificant businesses
were acquired during the period November 15, 1995 to April 1, 1996, for an      
approximate aggregate purchase price of $58 million.  The acquisitions of the   
following businesses comprise the mathematical majority of the aggregate of     
individually insignificant businesses:  Physician Management Group, Inc., Rhema,
Inc., Respiratory Home Care, Inc., CP02, Inc., National Home Care, Inc., Murray 
Medical, Inc. and Roth Medical Inc.; that provide home health care products and 
services through its locations in Texas, Louisiana, Tennessee, Utah, Colorado,  
Georgia, Pennsylvania, and Florida; that the Registrant intends to continue the 
business as acquired; that the Sellers had no material relationship with        
Registrant prior to the acquisition; 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. The Company filed 
a current report on Form 8-KA dated June 4, 1996 to provide the required        
financial statements of the acquired companies reported under Form 8-K dated May
7, 1996.  The Company filed a current report on Form 8-K dated May 17, 1996     
announcing the Company's intention to offer a new issue of $100 million of      
Convertible Subordinated Debentures due 2003.                                   

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 
Number                        Description                                                     Numbered 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.)                                                                                                 

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                                                        [Enlarge/Download Table]


                                                                                                 
 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.)                                           
 4.2  Indenture dated as of June 1, 1996, between the Company and PNC Bank, Kentucky, Inc.       
      (Incorporated by reference to Exhibit 4.1 to the Company's Registration Statement          
      No. 333-10915 on Form S-3).                                                                
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.)            

10.2  Amended and Restated Revolving Credit and Line of Credit Agreement, dated June 4, 1996,    
      by and among RoTech Medical Corporation, and SunTrust Bank, Central Florida, National      
      Association, individually and as Agent, NationsBank of Florida, N.A., NBD Bank,            
      PNC Bank, Kentucky, Inc., Barnett Bank of Central Florida, N.A. and Cooperatieve           
      Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", New York Branch,            
      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 (Incorporated
      by reference to Exhibit 10.6 to the Company's Annual Report in Form 10-K for the fiscal    
      year ended July 31, 1995.)                                                                 

10.7  RoTech Medical Corporation 1996 Key Employee Stock Option Plan                             
      (Incorporated by reference to Exhibit 10.7 to the Company's Annual Report                  
      on Form 10-K for the fiscal year ended July 31, 1996.)                                     

11.0  Computation of Earnings Per Share (Incorporated by reference to Exhibit                    
      11.0 to the Company's Annual Report on Form 10-K for the fiscal year ended                 
      July 31, 1996.)                                                                            

13.1  Annual report to security holders, filed herewith.                                         

22.1  Subsidiaries of Registrant (Incorporated by reference to Exhibit 22.1 to                   
      the Company's Annual Report on Form 10-K for the fiscal year ended July                    
      31, 1996.)                                                                                 

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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:  November 8, 1996

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                                         November 8, 1996       
---------------------------                                                                                                         
WILLIAM P. KENNEDY                                                                                                                  

/s/ Stephen P. Griggs          President, Assistant Secretary, Chief Operating Officer; and Director         November 8, 1996       
---------------------------                                                                                                         
STEPHEN P. GRIGGS                                                                                                                   

/s/ Janet L. Ziomek            Vice President - Finance                                                      November 8, 1996       
---------------------------                                                                                                         
JANET L. ZIOMEK                                                                                                                     

/s/ William A. Walker II       Secretary, and Director                                                       November 8, 1996       
---------------------------                                                                                                         
WILLIAM A. WALKER II                                                                                                                

---------------------------    Director                                                                      November 8, 1996       
JACK T. WEAVER                                                                                                                      

---------------------------    Director                                                                                             
LEONARD E.WILLIAMS                                                                                           November 8, 1996       

/s/ Rebecca R. Irish           Treasurer; Assistant Secretary, Principal Financial and                                              
---------------------------    Accounting Officer; and Chief Financial Officer                               November 8, 1996       
REBECCA R. IRISH                                                                                                                    


20

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K/A’ Filing		Date		First		Last			Other Filings
		9/30/00		12
		6/4/99		16
		12/9/96		1		17			DEF 14A,  PRE 14A
		12/1/96		16
Filed on:		11/8/96		16		20			DEF 14A
		10/21/96		1		16
For Period End:		7/31/96		1		19			10-K
		6/4/96		18		19			8-K/A
		6/1/96		14		19
		5/17/96		18					8-K,  S-8
		5/7/96		17		18			8-K
		4/1/96		18					8-K,  8-K/A
		11/15/95		18					8-K,  8-K/A
		7/31/95		13		19
		1/1/95		11
		7/31/94		13		19
		7/9/93		19
		7/31/92		3		19
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