1
FORM 10--Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________________ to __________________
Commission file number 0-8527
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DIALYSIS CORPORATION OF AMERICA
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(Exact name of registrant as specified in its charter)
Florida 59-1757642
- --------------------------------------------- -----------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
2337 West 76th Street, Hialeah, Florida 33016
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(Address of principal executive offices) (Zip Code)
(305) 364-1308
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name, former address and former fiscal year, if changed
since last report)
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] or No [ ]
Common Stock Outstanding
Common Stock, $.01 par value --3,587,844 shares as of October 31, 1996.
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DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
INDEX
PART I -- FINANCIAL INFORMATION
The Consolidated Condensed Statements of Operations (Unaudited) for the
three months and nine months ended September 30, 1996 and September 30, 1995
include the accounts of the Registrant and its subsidiaries.
Item 1. Financial Statements
1) Consolidated Condensed Statements of Operations for the three months
and nine months ended September 30, 1996 and September 30, 1995.
2) Consolidated Condensed Balance Sheets as of September 30, 1996 and
December 31, 1995.
3) Consolidated Condensed Statements of Cash Flows for the nine months
ended September 30, 1996 and September 30, 1995.
4) Notes to Consolidated Condensed Financial Statements as of September
30, 1996.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
PART II -- OTHER INFORMATION
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
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PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1996 1995
---- ---- ---- ----
Revenues:
Medical service revenue $ 968,705 $ 671,092 $2,839,730 $1,568,291
Interest and other income 103,534 83,433 210,029 307,300
---------- ---------- ---------- ----------
1,072,239 754,525 3,049,759 1,875,591
Cost and expenses:
Cost of medical services 639,437 450,494 1,872,937 1,038,554
Selling, general and administrative expenses 388,733 264,580 1,138,374 742,480
Interest expense 22,461 16,248 64,316 47,566
---------- ---------- ---------- ----------
1,050,631 731,322 3,075,627 1,828,600
---------- ---------- ---------- ----------
(Loss) income before income taxes
and minority interest 21,608 23,203 (25,868) 46,991
Income tax provision 7,000 17,000
---------- ---------- ---------- ----------
(Loss) income before minority interest 14,608 23,203 (42,868) 46,991
Minority interest in loss (income) of
consolidated subsidiary 4,532 3,112 6,943 16,348
---------- ---------- ---------- ----------
Net (loss) income $ 19,140 $ 26,315 $ (35,925) $ 63,339
========== ========== ========== ==========
Net (loss) income per common share $ .01 $ .01 $ (.01) $ .03
========== ========== ========== ==========
Weighted average shares 3,585,453 2,432,844 3,119,304 2,432,844
========== ========== ========== ==========
See notes to consolidated condensed financial statements.
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DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, December 31,
1996 1995(A)
------------- -------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $4,538,115 $1,061,351
Restricted cash 137,190 131,889
Accounts receivable, less allowances of $120,000 at
September 30, 1996 and $128,000 at December 31, 1995 500,095 503,584
Inventories 109,242 88,323
Prepaid expenses and other current assets 67,817 21,021
---------- ----------
Total current assets 5,352,459 1,806,168
Property and Equipment:
Land 168,358 168,358
Buildings and improvements 1,184,806 1,158,591
Machinery and equipment 1,095,605 1,041,264
Leasehold improvements 265,556 264,301
---------- ----------
2,714,325 2,632,514
Less accumulated depreciation 775,410 637,971
---------- ----------
1,938,915 1,994,543
Deferred expenses and other assets 43,451 171,156
---------- ----------
$7,334,825 $3,971,867
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 68,928 $ 326,165
Accrued expenses 152,893 219,952
Current portion of long-term debt 558,000 609,000
Income taxes payable 17,000
---------- ----------
Total current liabilities 796,821 1,155,117
Long-term debt, less current portion 124,503 151,942
Advances from parent company 345,010
Minority interest in subsidiary 82,917 95,967
Commitments and Contingencies
Stockholder's Equity
Common stock, $.01 par value, authorized 20,000,000
shares; issued and outstanding 3,587,844 shares at
September 30, 1996 and 2,432,844 shares at
December 31, 1995 35,878 24,328
Capital in excess of par value 3,747,105 305,997
Retained earnings 2,202,591 2,238,516
---------- ----------
Total stockholders' equity 5,985,574 2,568,841
---------- ----------
$7,334,825 $3,971,867
========== ==========
(A) Reference is made to the Company's Registration Statement on Form
SB-2 declared effective by the Securities and Exchange Commission in April 1996
which includes audited financial statements for the year ended December 31,
1995.
See notes to consolidated condensed financial statements.
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DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
------------------
1996 1995
---- ----
Operating activities:
Net (loss) income $ (35,925) $ 63,339
Adjustments to reconcile net (loss) income to net
cash used in by operating activities:
Depreciation 145,101 71,474
Amortization 7,879 9,158
Bad debt expense 103,734 25,772
Minority interest (6,943) (16,348)
Increase (decrease) relating to operating
activities from:
Accounts receivable (100,245) (387,154)
Inventories (20,919) (26,827)
Prepaid expenses and other current assets (46,796) (29,356)
Accounts payable (257,237) 127,705
Accrued expenses (67,059) (16,942)
Income taxes payable 17,000 (5,009)
---------- ---------
Net cash used in operating activities (261,410) (184,188)
Investing activities:
Additions to property and equipment, net of minor disposals (89,473) (508,237)
Proceeds from restricted cash 333,314 318,693
Restricted cash (338,615) (323,566)
Deferred expenses and other assets 119,826 (96,339)
Purchase portion of minority interest in subsidiary (15,000)
---------- ---------
Net cash provided by (used in) investing activities 25,052 (624,449)
Financing activities:
Net proceeds from securities offering 3,445,158
Advances from parent company 345,010 281,264
Payments on long-term debt (78,439) (62,870)
Proceeds from exercise of stock options 7,500
Dividend payment to minority shareholder (6,107)
---------- ---------
Net cash provided by financing activities 3,713,122 218,394
---------- ---------
Increase (decrease) in cash and cash equivalents 3,476,764 (590,243)
Cash and cash equivalents at beginning of period 1,061,351 686,707
---------- ---------
Cash and cash equivalents at end of period $4,538,115 $ 96,464
========== =========
See notes to consolidated condensed financial statements.
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DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION
The consolidated financial statements include the accounts of Dialysis
Corporation of America ("DCA") and its subsidiaries, collectively referred to
as the "Company". All material intercompany accounts and transactions have
been eliminated in consolidation. The Company is a 67.2% owned subsidiary of
Medicore, Inc. (the "Parent"), having been 99.1% owned by the Parent until the
completion of the Company's public offering. See Notes 5 and 7.
GOVERNMENT REGULATION
Most of the Company's revenues are attributable to payments received under
Medicare, which is supplemented by Medicaid or comparable benefits in the
states in which the Company operates. Reimbursement rates under these programs
are subject to regulatory changes and governmental funding restrictions.
Although the Company is not aware of any future rate changes, significant
changes in reimbursement rates could have a material effect on the Company's
operations.
INTEREST AND OTHER INCOME
Interest and other income is comprised as follows:
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------- --------------------
1996 1995 1996 1995
---- ---- ---- ----
Rental income $ 26,912 $22,438 $ 75,919 $104,082
Interest income from Medicore 56,286 179,837
Other interest income 57,091 4,511 111,265 17,639
Other 19,531 198 22,845 5,742
-------- ------- -------- --------
$103,534 $83,433 $210,029 $307,300
======== ======= -------- ========
RECLASSIFICATIONS
Certain reclassifications have been made to the 1995 financial statements to
conform to the 1996 presentation.
LONG-LIVED ASSETS
In 1996, the Company has adopted the provisions of FAS 121-Accounting for the
Impairment of Long-Lived Assets. FAS 121 requires impairment losses to be
recorded on long-lived assets when indicators of impairment are present and the
undiscounted cash flows estimated to be generated by those assets are less than
the assets' carrying amount. Based on current circumstances, the Company is
not aware of any significant impairment losses.
STOCK-BASED COMPENSATION
In 1996, the Company adopted the provisions of FAS 123-Accounting for
Stock-Based Compensation. The Company will continue to account for stock-based
compensation plans under the provisions of APB 25-Accounting for Stock Issued
to Employees. The Company will disclose the pro forma information required for
stock-based compensation plans in its annual reports in accordance with FAS
123.
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DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
SEPTEMBER 30, 1996
(UNAUDITED)
NOTE 2--INTERIM ADJUSTMENTS
The financial summaries for the three months and nine months ended September 30,
1996 and September 30, 1995 are unaudited and include, in the opinion of
management of the Company, all adjustments (consisting of normal recurring
accruals) necessary to present fairly the earnings for such periods. Operating
results for the three months and nine months ended September 30, 1996 are not
necessarily indicative of the results that may be expected for the entire year
ending December 31, 1996.
While the Company believes that the disclosures presented are adequate to make
the information not misleading, it is suggested that these Consolidated
Condensed Financial Statements be read in conjunction with the financial
statements and notes included in the Company's audited financial statements for
the year ended December 31, 1995.
NOTE 3--LONG TERM DEBT
In December 1988, the Company obtained a $480,000 fifteen-year mortgage through
November 2003 on its building in Lemoyne, Pennsylvania with interest at 1% over
the prime rate. The remaining principal balance under this mortgage amounted
to approximately $232,000 and $256,000 at September 30, 1996 and December 31,
1995, respectively. In December 1988, the Company also obtained a $600,000
fifteen-year mortgage through November 2003 on its building in Easton, Maryland
with interest at 1% over the prime rate. The remaining principal balance under
this mortgage amounted to approximately $290,000 and $320,000 at September 30,
1996 and December 31, 1995, respectively. The bank has the right to demand
repayment on the outstanding balance of the borrowings under these mortgages
which have accordingly been classified as current liabilities. At December 31,
1995, the Company was in violation of certain covenants under these loans
principally relating to net worth and debt service ratio requirements. The
lender waived compliance with these covenants through December 31, 1996.
The Company has an equipment purchase agreement for kidney dialysis machines for
its new facilities in Pennsylvania. Monthly payments are $4,435 commencing
September 1995, including principal and interest, through September 2000 with
interest at 12%. The initial principal balance of $195,130, after a down
payment of $8,870, represents a noncash financing activity which is a
supplemental disclosure required by FAS 95. The remaining principal balance
under this agreement amounted to approximately $161,000 and $185,000 at
September 30, 1996 and December 31, 1995, respectively.
The prime rate was 8.25 % as of September 30, 1996 and 8.5% as of December 31,
1995.
The carrying amount of borrowings approximate their fair value.
Interest payments on long-term debt amounted to approximately $18,000 and
$55,000 for the three months and nine months ended September 30, 1996 and
$15,000 and $47,000 for the same periods of the preceding year..
NOTE 4--INCOME TAXES
The Company was included in the consolidated federal and state income tax
returns of the Parent until the completion of its public offering in April
1996. The Company had a net operating loss carryforward of approximately
$567,000 at December 31, 1995, which was available to offset consolidated
taxable income. Subsequent to the completion of the Company's public offering,
the Company will file separate federal and state income tax returns with the
income tax liability reflected on a separate return basis with its available
net operating loss carryforwards having been utilized prior to completion of
its public offering.
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DIALYSIS CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
SEPTEMBER 30, 1996
(UNAUDITED)
NOTE 4--INCOME TAXES--CONTINUED
Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The Company had deferred
tax liabilities of approximately $60,000 at September 30, 1996, consisting
primarily of tax over book depreciation and amortization, and deferred tax
assets of approximately $60,000, consisting primarily of differences in book and
tax basis of receivables.
There were no income tax payments for the nine months ended September 30, 1996
or September 30, 1995.
NOTE 5--TRANSACTIONS WITH PARENT
The Parent provides certain administrative services to the Company including
office space and general accounting assistance. These expenses and all other
central operating costs are charged on the basis of direct usage, when
identifiable, or on the basis of time spent. In the opinion of management, this
method of allocation is reasonable. The amount of expenses allocated by the
Parent totaled approximately $60,000 and $180,000 for the three months and nine
months ended September 30, 1996, and for the same periods of the preceding year.
On October 4, 1995, the Parent repaid approximately $1,000,000 of the advances
due to the Company.
On November 10, 1995, the Company's Board of Directors authorized the
declaration of a $1.30 per share dividend (after giving effect to a 50% stock
dividend also authorized by the Board) for which the Parent's portion related to
its 99.1% ownership interest in the Company amounted to approximately $3,134,000
which was paid via a reduction in the intercompany receivable from the Parent.
As a result of this dividend and repayments by the Parent, the intercompany
receivable from the Parent, on which the Company had been earning interest
income, was repaid. The intercompany receivable from the Parent bore interest
at the short-term Treasury bill rate commencing January 1, 1994. Interest on
these advances amounted to $56,000 and $180,000 for the three months and nine
months ended September 30, 1995 and was included in the intercompany receivable
from Medicore.
As of September 30, 1996, the Company had an intercompany advance payable to the
Parent of approximately $345,000 which bears interest at the short-term Treasury
Bill rate. Interest on this intercompany advance amounted to approximately
$5,000 and $10,000 for the three months and nine months ended September 30,
1996 which is included in the intercompany advance payable. The Parent has
agreed not to require repayment of the intercompany advances prior to October 1,
1997 and therefore, the advances have been classified as long-term at September
30, 1996.
NOTE 6--STOCK OPTIONS
In November, 1995, the Company adopted a stock option plan for up to 250,000
options. Pursuant to this plan, in November, 1995, the board of directors
granted 210,000 options to certain of its officers, directors, employees and
consultants of which 197,000 options were outstanding at September 30, 1996.
These options are exercisable for a period of five years through November 9,
2000 at $1.50 per share.
In August 1995, the board of directors granted 15,000 options to the medical
directors at its three kidney dialysis centers. These options are exercisable
for a period of 3 years through August 18, 1999 at $4.75 per share.
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NOTE 7--COMMON STOCK
In April 1996, the Company completed a public offering providing it with net
proceeds including the exercise of the underwriters' overallotment option of
approximately $3,445,000. See Item 2, "Management's Discussion and Analysis of
Financial Condition and Results of Operations".
Upon completion of its public offering, the Company retained the underwriter to
provide financial consulting services pertaining to the Company's business, at a
monthly fee of $3,000 per month for a period of 18 months, which was paid in
full at the closing of the offering.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
Medical service revenue increased approximately $298,000 (44%) and
$1,271,000 (81%) for the three months and nine months ended September 30, 1996
compared to the same periods of the preceding year. The increase included the
commencement of treatments at the Company's new dialysis centers in Lemoyne,
Pennsylvania in June 1995 and Wellsboro, Pennsylvania in October 1995, which
accounted for approximately $487,000 and $1,300,000 in revenues for the three
months and nine months ended September 30, 1996 with the new Lemoyne center
having revenues of $186,000 and $224,000 for the three months and nine months
ended September 1995. Revenues attributable to the Company's Florida dialysis
center decreased $3,000 and increased $196,000 for the three months and nine
months ended September 30, 1996 compared to the same periods of the preceding
year. Although the new Lemoyne and Wellsboro, Pennsylvania centers are
expected to result in increased revenues, during their developmental stage,
these centers will adversely affect the Company's results of operations.
As a result of the dividend to the Parent and advance repayment by the
Parent (see "Liquidity and Capital Resources below), the intercompany
receivable from the Parent on which the Company had been earning interest
income was repaid. Interest income from the Parent, which is included in
interest and other income amounted to approximately $56,000 and $180,000 for
the three months and nine months ended September 30, 1995.
Cost of medical services sales were relatively stable amounting to 66% for
the three months and nine months ended September 30, 1996, compared to 67% and
66% for the same periods of the preceding year.
Selling, general and administrative expenses increased approximately
$124,000 and $396,000 for the three months and nine months ended September 30,
1996 compared to the same periods of the preceding year reflecting increases
associated with the new Pennsylvania dialysis centers. Selling, general and
administrative expenses as a percentage of medical service revenues amounted to
40% for the three months and nine months ended September 30, 1996 compared to
39% and 47% the same periods of the preceding year.
Interest expense increased approximately $6,000 and $17,000 for the three
months and nine months ended September 30, 1996 compared to the same periods of
the preceding year including increases as a result of the equipment purchase
agreements for dialysis machines at the new Pennsylvania centers and interest
of approximately $5,000 and $10,000 for the three months and nine months ended
September 30, 1996 on the intercompany advance payable to the Parent with
interest at the short-term Treasury Bill rate. The prime rate was 8.25% at
September 30, 1996 and 8.5% at December 31, 1995.
LIQUIDITY AND CAPITAL RESOURCES
Working capital totaled $4,556,000 at September 30, 1996, which reflected
an increase of approximately $3,905,000 during the nine months ended September
30, 1996, largely as a result of the Company's security offering completed
during the second quarter of 1996. Included in the changes in components of
working capital was an increase in cash and cash equivalents of $3,477,000
which included net cash used in operating activities of $261,000, net cash
provided by investing activities of $25,000 and net cash provided by financing
activities of $3,713,000 (including proceeds from the Company's security
offering of $3,445,000, advances from Parent of $345,000 and debt repayments of
$78,000).
During 1988, the Company obtained mortgages totaling $1,080,000 on its two
buildings, one in Lemoyne, Pennsylvania and the other in Easton, Maryland, each
of which housed the Company's dialysis centers. These centers were sold in
October, 1989. The mortgages had a combined remaining balance of $522,000 and
$576,000 at September 30, 1996 and December 31, 1995 respectively. The Company
was in default of certain covenants principally relating to net worth and debt
service ratio requirements under these loan agreements as of December 31, 1995.
The lender has waived compliance with these covenants through December 31, 1996.
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The bank has liens on the real and personal property of the Company,
including a lien on all rents due and security deposits from the rental of
these properties. The loans contain a provision allowing the bank mandatory
repayment upon 90 days written notice after five years. The five year period
has elapsed; accordingly, while no notice has been given, the unpaid principal
balance is carried as a current liability. The unaffiliated Maryland dialysis
center continues to lease space from the Company in its building. The
Pennsylvania center relocated during 1995 and the Company constructed its own
new dialysis center at that property which commenced treatments in June
1995. The Company also opened a new dialysis center in a leased facility in
Wellsboro, Pennsylvania in October 1995.
In November, 1995, the board of directors authorized a 50% stock dividend
which increased the outstanding Common Stock to 2,432,844 shares. The board
also authorized the declaration of a $1.30 per share dividend for which the
Parent's portion related to its 99.1% ownership interest in the Company
amounted to approximately $3,134,000, which was paid by a reduction in the
intercompany advances receivable from the Parent, and the minority interest
portion of approximately $29,000 was paid in cash.
In October, 1995, the Parent repaid approximately $1,000,000 of the
indebtedness due to the Company.
The Company believes that current levels of working capital, including the
proceeds of its security offering, will enable it to successfully meet its
liquidity demands for at least the new twelve months.
Net proceeds of the Company's security offering were approximately
$3,445,000 including the over-allotment option exercise. The Company, having
operated on a larger scale in the past, is seeking to expand its outpatient
dialysis treatment facilities and inpatient dialysis care. Such expansion,
whether through acquisition of existing centers, or the development of its own
dialysis centers, requires capital, which was the basis for the Company's
security offering. No assurance can be given that the Company will be
successful in implementing its growth strategy or that the funds from its
securities offering will be adequate.
The Company has entered into agreements for medical directors, and is
negotiating building leases and construction contracts for two new dialysis
centers which it intends to establish, one in New Jersey and one in
Pennsylvania. It is anticipated that the new centers would become operational
in the second quarter of 1997. Development of new centers is estimated to cost
from $600,000 to $750,000 per dialysis center, including working capital
requirements. After the new centers commence operations, during their
developmental stage, they are expected to adversely affect the Company's results
of operations.
INFLATION
Inflationary factors have not had a significant effect on the Company's
operations, although the Company can experience increased costs of supplies,
salaries and general and administrative expenses.
A substantial portion of the Company's revenue is subject to reimbursement
rates established and regulated by the federal government. These rates do not
automatically adjust for inflation. Any rate adjustments relate to legislation
and executive and Congressional budget demands, and have little to do with the
actual cost of doing business. Therefore, dialysis services revenues cannot be
voluntary increased to keep pace with increases in nursing and other patient
care costs.
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PART II-OTHER INFORMATION
Item 5. Other Information
A key factor in the success of a dialysis facility is its relationship
with area nephrologists. An End Stage Renal Dialysis ("ESRD") patient
generally seeks treatment near such patient's home and where such patient's
nephrologist has practice privileges. The conditions of participation in the
Medicare ESRD program mandate that treatment at a dialysis facility be "under
the general supervision of a Director who is a physician". The Company has
engaged by written agreement qualified physicians to serve as Medical Directors
("Directors") for each of its facilities ("MD Agreement"). The loss of a
Director or an important referring physician at a particular center could have
a material adverse effect on the operations of that facility and the Company.
Compensation of Directors is separately negotiated for each facility and
generally depends on competitive factors in the local market, the physician's
qualifications and the size of the facility.
The Company recently established two new subsidiaries to operate dialysis
centers in their specific geographic areas, one being Dialysis Services of NJ,
Inc.-Manahawkin ("DSNJ") and the other, Dialysis Services of PA, Inc.-Carlisle
("Carlisle"). Each has entered into an MD Agreement. DSNJ has an MD Agreement
with a professional association for five years through September, 2001 with a
five year renewal privilege. The MD Agreement specifies the Director and
establishes the compensation of the Director, who remains an independent
consultant. Under the MD Agreement, the Director elects the alternate
reimbursement plan under the ESRD program whereby the physician's fee for
services is billed to the government payment authority on a direct basis, and
such fee is paid directly to the physician or professional association as the
case may be. The Director (or professional association) maintains its own
medical malpractice insurance. The MD Agreement provides for non-competition
for one year in a limited area related to the dialysis center. The MD
Agreement does not prohibit the physician from providing direct patient care
services at other locations, and consistent with law, such MD Agreement does
not require a physician to refer patients to the Company's dialysis center.
During the first through the third year of the MD Agreement, DSNJ has the
opportunity to determine if the continued operation of the dialysis center is
feasible and may re-negotiate the terms of the MD Agreement or terminate the MD
Agreement.
The Carlisle, Pennsylvania center is seeking its licenses and approvals to
provide dialysis treatments in that area. It has retained a physician as its
Director on a short-term basis until that center is approved by federal and
state authorities to initiate dialysis services, at which time it will
negotiate an MD Agreement with that nephrologist, who is a Director of another
dialysis facility owned by the Company.
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Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Part I Exhibits
(11) Statements re: computation of per share earnings.
Part II Exhibits
(10)(i) MD Agreement between Dialysis Services of NJ, Inc.-
Manahawkin and Oceanview Medical group, P.A. dated September 5, 1996 [*].
(10)(ii) MD Agreement between Dialysis Services of PA., Inc.-
Carlisle and Herb Soller, M.D. dated October 1, 1996 [*].
(27) Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the quarter ended September
30, 1996.
[*] Confidential portions omitted have been filed separately with the
Securities and Exchange Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DIALYSIS CORPORATION OF AMERICA
By: /s/ DANIEL R. OUZTS
-----------------------------------
DANIEL R. OUZTS, Vice President/Finance
Controller and Principal Financial Officer
Dated: November 8, 1996
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EXHIBIT INDEX
Exhibit
No.
- --------
Part I Exhibits
(11) Statement re: computation of per share (loss) earnings
Part II Exhibits
(10) Material Contracts
(i) MD Agreement between Dialysis Services of NJ, Inc.- Manahawkin and
Oceanview Medical group, P.A. dated September 5, 1996 [*].
(ii) MD Agreement between Dialysis Services of PA., Inc.- Carlisle and
Herb Soller, M.D. dated October 1, 1996 [*].
(27) Financial Data Schedule (for SEC use only).