Physician Support Systems, Inc.

Ticker: PHSS		Route 230 and Eby-Chiques Road
Exchange: NASDAQ-National Market		Mount Joy, Pennsylvania 17552
Industry: Service		(717) 653-5340

Type of Shares:	Common Shares	Filing Date:	12/21/95
U.S. Shares:	3,500,000	Offer Date:	2/12/96
Non-U.S. Shares:	0	Filing Range:	$9.00 - $11.00
Primary Shares:	3,500,000	Offer Price:	$12.00
Secondary Shares:	0	Gross Spread:	$0.84
Offering Amount:	$35,000,000	Selling:	$0.51
Expenses:	$800,000	Reallowance:	$0.10
Shares Out After:	5,740,000

Manager	Tier	Phone
Volpe, Welty & Company	Lead Manager	(415) 956-8120

Auditor: Deloitte & Touche
	Audited Income	Latest Unaudited Income	Prior Unaudited Income		Balance Sheet
	12/31/94	9/30/95	9/30/94		9/30/95
Revenue:	$18.77	$14.63	$14.79	Assets:	$21.62
Net Income:	-$1.07	-$0.94	-$0.36	Liabilities:	$22.67
EPS:	-$0.58	-$0.51	-$0.24	Equity:	-$1.05
Note: Dollar amounts are in U.S. millions; Audited figures expressed as full year, unaudited figures are partial year

Business Description

The company is a leading provider of business management services to hospital affiliated physicians in an array of practice settings, including solo and group practices, independent practice associations, specialty networks and other groups. The company offers its clients a broad variety of business management services, ranging from accounts receivable management to financial, administrative and strategic support, data management and information systems support. The company employs its proprietary technology and extensive financial and patient encounter databases to provide a comprehensive range of managed care services to its clients, including contract review and negotiation, implementation and administration, thereby enhancing their ability to profitably participate in managed care systems. The company's services enable physicians to maintain their independence and clinical autonomy while maximizing their reimbursement and cashflow. The company believes that it is one of the largest providers of business management services to physicians.

Use of Proceeds

The company intends to apply $9.5 million of the net proceeds of the offering to pay the initial amount of the purchase price for the Acquired Businesses and apply an aggregate of $2.0 million of the net proceeds of the offering to payments due in connection with the acquisition of one of the Acquired Businesses during the first 12 months following consummation of the offering. Approximately $11.1 million of the net proceeds will be used to retire short- and long-term debt outstanding of PSS. Approximately $2.932 million of the net proceeds will be used to redeem all of the company's 10% Preferred Stock, Series A and Series B outstanding, consisting of approximately 3,482 shares of Series A and 2,382 shares of Series B Preferred Stock. The remaining net proceeds of $12.728 million will be used for working capital and other general corporate purposes, which are expected to include future acquisitions.

Last updated: 10/28/96