<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q

         [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended March 31, 1997

         [ ] 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: 0-29090

                          MEDICAL MANAGER CORPORATION
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          DELAWARE                                           59-3396629
-------------------------------------------------------------------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)

3001 NORTH ROCKY POINT DRIVE EAST, SUITE 100, TAMPA, FLORIDA        33607
-------------------------------------------------------------------------------
(Address of principal executive offices)                          (Zip Code)

                                 (813) 287-2990
-------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
-------------------------------------------------------------------------------
              (Former name, former address and former fiscal year
                         if changed since last report)

         Indicate by check 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
            ---   ---

         As of May 14, 1997, 18,413,408 shares of the registrant's common stock 
were issued and outstanding.




                                     
<PAGE>   2



                         PART I - FINANCIAL INFORMATION
                         ------------------------------

ITEM 1.  FINANCIAL STATEMENTS.

         The following consolidated financial statements of Medical Manager
Corporation, a Delaware corporation, have been prepared in accordance with the
instructions to Form 10-Q and, therefore, omit or condense certain footnotes
and other information normally included in financial statements prepared in
accordance with generally accepted accounting principles. In the opinion of
management, all adjustments necessary for a fair presentation of the financial
information for the interim periods reported have been made. Results of
operations for the quarter ended March 31, 1997 are not necessarily indicative
of the results for the entire fiscal year ended December 31, 1997.



                                       2


<PAGE>   3




                          MEDICAL MANAGER CORPORATION
                          CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)
<TABLE>
<CAPTION>

                                                                             March 31,      December 31,
                                                                               1997            1996
                                                                            (Unaudited)
                                      ASSETS

<S>                                                                           <C>                 <C>
CURRENT ASSETS
  Cash and cash equivalents............................................       $18,903             $1,765
  Investments..........................................................           203                202
  Accounts receivable..................................................         5,779              1,779
  Inventory............................................................           537                  0
  Prepaid expenses and other current assets............................           568                118
  Deferred income taxes................................................           462                  0
                                                                         ------------      -------------
        Total current assets...........................................        26,452              3,864

PROPERTY AND EQUIPMENT, net............................................         2,397                505
GOODWILL AND OTHER INTANGIBLES, net....................................         6,178                  0
OTHER ASSETS...........................................................           863                161
                                                                         ------------      -------------
        Total assets...................................................       $35,890             $4,530
                                                                         ============      =============

                        LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Notes payable........................................................       $ 4,018             $    0
  Accounts payable and accrued liabilities.............................         4,018                760
  Customer deposits and deferred maintenance revenue...................         3,992                940
  Income taxes payable.................................................           999                  0
                                                                         ------------      -------------
        Total current liabilities......................................        13,027              1,700

DUE TO AFFILIATE.......................................................             0                117
                                                                         ------------      -------------
        Total liabilities..............................................        13,027              1,817
                                                                         ------------      -------------
STOCKHOLDERS' EQUITY
  Common stock.........................................................           177                 64
  Additional paid-in capital...........................................        21,499                  0
  Retained earnings....................................................         1,187              2,649
                                                                         ------------      -------------
        Total stockholders' equity.....................................        22,863              2,713
                                                                         ------------      -------------
        Total liabilities and stockholders' equity.....................       $35,890             $4,530
                                                                         ============      =============
</TABLE>


              The accompanying notes are an integral part of these
                      consolidated financial statements.



                                       3
<PAGE>   4

                          MEDICAL MANAGER CORPORATION
                       CONSOLIDATED STATEMENTS OF INCOME
                        (In Thousands Except Share Data)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                          Quarter Ended                  ProForma Quarter
                                                            March 31,                     Ended March 31,
                                                       1997           1996             1997            1996
<S>                                                   <C>            <C>              <C>             <C>
Revenue
  Systems.....................................        $6,193         $2,208          $ 8,215          $5,902
  Maintenance and other.......................         3,804            744            4,923           3,816
                                                   ---------      ---------       ----------      ----------
        Total revenue.........................         9,997          2,952           13,138           9,718
                                                   ---------      ---------       ----------      ----------
Cost of systems revenue                                1,788            362            2,936           1,836
  Maintenance and other.......................         1,852             69            2,447           2,097
                                                   ---------      ---------       ----------      ----------
        Total cost of revenue.................         3,640            431            5,385           3,933
                                                   ---------      ---------       ----------      ----------
                 Gross margin.................         6,357          2,521            7,755           5,785
                                                   ---------      ---------       ----------      ----------
Operating expenses
  Selling, general and administrative.........         2,332            289            3,065           2,262
  Research and development....................           776            574              798             667
  Depreciation and amortization...............           227             88              317             291
                                                   ---------      ---------       ----------      ----------
        Total operating expenses..............         3,335            951            4,180           3,220
                                                   ---------      ---------       ----------      ----------
                 Income from operations.......         3,022          1,570            3,575           2,565

Other income (expense)
  Interest expense............................           (45)             0              (45)              0
  Interest income.............................           149             32              149               0
                                                   ---------      ---------       ----------      ----------
Income before income taxes....................         3,126          1,602            3,679           2,565

Income taxes..................................           576              0            1,389             988
                                                   ---------      ---------       ----------      ----------
                 Net income...................        $2,550         $1,602          $ 2,290          $1,577
                                                   =========      =========       ==========      ==========
Income per share..............................         $0.14                           $0.13           $0.09

Shares used in computing income per share.....    17,705,470                      17,705,470      17,705,470
</TABLE>


              The accompanying notes are an integral part of these
                      consolidated financial statements.



                                       4
<PAGE>   5

                          MEDICAL MANAGER CORPORATION
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                 (In Thousands)
                                  (Unaudited)
<TABLE>
<CAPTION>    
                                                                  
                                               Common Stock           Additional
                                            -------------------        paid in      Retained
                                            Shares       Amount        Capital      Earnings         Total

<S>                                          <C>          <C>         <C>            <C>            <C>   
Balance January 1, 1997...................   6,370        $ 64        $      0       $ 2,649      $   2,713
Dividends (by PPI prior to
  Mergers)................................                                            (4,012)        (4,012)
Issuance of common stock at
  the Offering, net.......................   6,000          60          58,170                       58,230
Mergers:
  Payments to PPI stockholder.............                             (35,062)                     (35,062)
  Issuance of Common Stock and payment
   to other Founding Companies'
   stockholders, net .....................   5,335          53          (1,609)                      (1,556)
Net income................................                                             2,550          2,550
                                            ------        ----        --------       -------      ---------

Balance March 31, 1997....................  17,705        $177        $ 21,499       $ 1,187      $  22,863
                                            ======        ====        ========       =======      =========
</TABLE>



              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       5


<PAGE>   6




                          MEDICAL MANAGER CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
                                  (Unaudited)
<TABLE>
<CAPTION>


                                                                               Quarter Ended March 31,
                                                                                1997             1996
<S>                                                                            <C>              <C>
Cash flows from operating activities:
  Net income...........................................................     $  2,550          $ 1,601
     Adjustments to reconcile net income to net cash
       provided by operating activities:
     Depreciation and amortization.....................................          227               88
     Deferred income taxes.............................................         (350)               0
  Changes in assets and liabilities, net of effects from acquisitions
     Accounts receivable...............................................       (1,494)             148
     Inventory.........................................................          134                0
     Prepaid expenses and other assets.................................         (384)             (11)
     Accounts payable and accrued liabilities..........................       (1,327)            (233)
     Customer deposits and deferred maintenance revenue................           75              285
     Income taxes payable..............................................          866                0
                                                                         -----------      -----------
  Net cash provided by operating activities............................          297            1,878
                                                                         -----------      -----------
Cash flows from investing activities:
  Purchases of investments.............................................            0              (20)
  Proceeds from sale of investments....................................            0              100
  Purchases of property and equipment..................................         (196)            (101)
  Payments for acquisitions made, net of cash acquired.................       (9,466)               0
                                                                         -----------      -----------
  Net cash used in investing activities................................       (9,662)             (21)
                                                                         -----------      -----------
Cash flows from financing activities:
  Payment of notes payable.............................................          (46)               0
  Due to affiliates....................................................        4,997                0
  Net proceeds from sale of common stock...............................       58,230                0
  Payments made to stockholder of PPI..................................      (35,062)               0
  Dividends............................................................       (1,616)            (578)
                                                                         -----------      -----------
  Net cash provided by (used in) financing activities..................       26,503             (578)
                                                                         -----------      -----------
Net change in cash and cash equivalents                                       17,138            1,279

Cash and cash equivalents:
  Beginning of period..................................................        1,765            1,167
                                                                         -----------      -----------
  End of period........................................................     $ 18,903          $ 2,446
                                                                         ===========      ===========
Non-cash dividends.....................................................     $  2,398          $     0
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.




                                       6

<PAGE>   7



                          MEDICAL MANAGER CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION:

         Medical Manager Corporation ("MMC") was founded on July 10, 1996 to
bring together the research and development, sales, marketing and support
resources for The Medical Manager, a leading physician practice management
system for independent physicians, physician groups, management service
organizations ("MSOs"), independent practice associations ("IPAs"), managed
care organizations and other providers of health care services in the United
States. On February 4, 1997 MMC acquired ("the Mergers") simultaneously with
the closing of its initial public offering of common stock ("the Offering")
five companies (the "Founding Companies"): Medical Manager Research &
Development, Inc. (formerly Personalized Programming, Inc.) ("PPI"), Medical
Manager Sales & Marketing, Inc. (formerly Systems Plus, Inc.) ("SPI"), Medical
Manager Southeast, Inc. (formerly National Medical Systems, Inc.) ("NMS"),
Medical Manager RTI, Inc. (formerly RTI Business Systems, Inc.) ("RTI") and
Medical Manager Systems Management, Inc. (formerly Systems Management, Inc.)
("SMI"). MMC and the Founding Companies are referred to collectively as the
"Company." All outstanding shares of the Founding Companies' capital stock were
converted into shares of MMC Common Stock concurrently with the consummation of
the Offering. The aggregate consideration paid by MMC for the Founding
Companies was approximately $46.9 million in cash and 11.7 million shares of
Common Stock of MMC for an aggregate value of $175.7 million. The acquisitions
were accounted for as a combination of the Founding Companies at historical
cost for accounting purposes. PPI is identified as the acquiror for financial
statement presentation purposes and is presented on a combined basis with MMC
from July 10, 1996. MMC conducted no significant operations and generated no
revenue prior to the closing of the Offering.

        The accompanying historical financial statements include MMC and PPI
through February 4, 1997, the date of the acquisition of the Founding
Companies, after which the financial statements reflect the results of MMC, PPI
and the other Founding Companies.

        The pro forma statements of operations include the results of MMC, PPI
and the other Founding Companies as if they had been acquired on January 1,
1996. Pro forma data also reflects adjustments for (i) compensation
differentials to employees and former stockholders of the Founding Companies
(ii) effects of assets distributed to and the costs of certain building leases
executed by MMC with the stockholders of PPI and SMI; (iii) changes in interest
expense, interest and dividend income and realized gains (losses) on
investments for pro forma adjustments to cash, investments and debt; (iv)
termination costs for certain leases and former employees resulting from the
acquisition of the Founding Companies and (v) income taxes as if the entities
were combined and subject to the effective federal and state statutory rates
throughout the periods presented.

        The pro forma statements of operations may not be indicative of actual
results if the Mergers had occurred on the date indicated or which may be
realized in the future. Neither expected benefits and cost reductions
anticipated by the Company nor future corporate costs of MMC nor interest
income from investment of offering proceeds have been reflected in the pro
forma statements of operations for 1996, nor for the period from January 1,
1997 through February 4, 1997. The actual results of MMC, PPI and the other
Founding Companies for the period from February 5, 1997 through March 31, 1997,
inclusive of actual corporate costs and interest income, have been included in
the pro forma results for the three months ended March 31, 1997. It is
suggested that these pro forma combined statements of operations be read in
conjunction with the pro forma combined financial statements of MMC and the
Founding Companies and the notes thereto included in the Company's Registration
Statement on Form




                                       7
<PAGE>   8



S-1 (Reg. No. 333-25215) relating to the Shelf Registration of Common Stock,
which was filed with the Securities and Exchange Commission ("SEC") on April
15, 1997.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

         The accompanying interim financial statements do not include all
disclosures included in the financial statements for the years ended December
31, 1995 and 1996 as included in the Company's Form 10-K for the year ended
December 31, 1996, and therefore should be read in conjunction with the
financial statements included in the Form 10-K.

         Revenue from systems includes the sale of systems and revenue from
software licenses.

         In the opinion of management, the interim financials filed as part of
this Form 10-Q reflect all adjustments, consisting only of normal recurring
accruals, necessary for a fair presentation of the financial position and the
results of operations and of cash flows for the interim periods presented.

NOTE 3 - NOTES PAYABLE:

         Notes payable at March 31, 1997 include approximately $3.9 million for
amounts due to the stockholders of PPI and SPI for dividends equal to the
estimated balance in the S Corporations Accumulated Adjustment Account as of
February 4, 1997. Such amounts are due on demand and carry annual interest
rates from 5.85% to 8.0%. Approximately $1.5 million was paid in April, 1997.

NOTE 4 - EARNINGS PER SHARE:

         Historical earnings per share calculations for the first quarter of
1996 have not been presented because it is not considered meaningful as a
result of the exclusion of the Founding Companies as discussed in Note 1.

         In February 1997 the Financial Accounting Standards Board issued SFAS
No. 128, "Earnings per Share", which is effective for periods ending after
December 15, 1997. This statement establishes standards for computing and
presenting earnings per share data. Management is currently assessing the
impact of SFAS No. 128 on the Company's presentation of earnings per share data
in future periods.

NOTE 5 - UNAUDITED PRO FORMA INCOME TAX INFORMATION:

         Prior to the acquisition of the Founding Companies, PPI was an S
Corporation and, accordingly, the combined financial statements of MMC and PPI
did not reflect a provision for income taxes, as income taxes were the
responsibility of PPI's individual stockholder. Effective with the acquisition
of the Founding Companies, PPI, SPI and SMI terminated their S Corporation
status. The following unaudited pro forma income tax, based on historical
information, is presented in accordance with Statement of Financial Accounting
Standards No. 109 as if PPI, SPI and SMI had each been a C Corporation subject
to federal and state income taxes throughout the periods presented.



                                       8

<PAGE>   9



(In Thousands)
<TABLE>
<CAPTION>

                                                       Quarter Ended          Quarter Ended
                                                       March 31, 1997         March 31, 1996
                                                       --------------------------------------

<S>                                                        <C>                    <C>   
Income before provision for income taxes                   $3,126                 $1,601
Provision for income taxes                                  1,176                    616
                                                           ------                 ------
Pro forma net income                                       $1,950                 $  985
                                                           ======                 ======
</TABLE>


NOTE 6 - SUBSEQUENT EVENTS

         Subsequent to the consummation of the Offering, the Company executed
definitive merger agreements to acquire the following Medical Manager dealers
(the "Acquisitions"): (i) Adaptive Health Systems of Washington based in Federal
Way, Washington; (ii) LSM Computing, Inc. based in Somerville, New Jersey; and
(iii) UNICO, Inc. based in Evansville, Indiana. The Acquisitions were accounted
for using the pooling-of-interests method of accounting. The aggregate
consideration paid for the Acquisitions consisted of 707,938 shares of Common
Stock. The closings of the Acquisitions occurred during the week of April 28,
1997. The impact of the Acquisitions on revenues, net income or earnings per
share is not considered material.

         Also subsequent to the consummation of the Offering, the Company
executed a definitive merger agreement to acquire Specialized Systems, Inc., a
Medical Manager dealer based in Van Nuys, California (the "Proposed
Acquisition"). The Proposed Acquisition will be accounted for using the
pooling-of-interests method of accounting. The consideration to be paid to the
Proposed Acquisition is approximately 286,198 shares of Common Stock. The
closing of the Proposed Acquisition is expected to be in May 1997.





                                       9
<PAGE>   10



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.

OVERVIEW

         This filing contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements are
based on current plans and expectations and involve risks and uncertainties
that could cause actual future activities and results of operations to be
materially different from those set forth in the forward-looking statements.
Important factors that could cause actual results to differ include, among
others, risks associated with acquisitions, fluctuations in operating results
because of acquisitions and variations in stock prices, changes in government
regulations, competition and risks of operations and growth of the newly
acquired businesses.

         Medical Manager Corporation ("MMC") was founded in July, 1996 to bring
together the research and development, sales, marketing and support resources
for The Medical Manager, a leading physician practice management system for
independent physicians, physician groups, management service organizations
("MSOs"), independent practice associations ("IPAs"), managed care
organizations and other providers of health care services in the United States.
Simultaneously with the closing of the Company's initial public offering (the
"Offering") on February 4, 1997, MMC acquired (the "Merger") the following five
companies which became wholly owned subsidiaries of MMC (the "Founding
Companies"): medical Manager Research & Development, Inc. (formerly
Personalized Programming, Inc.) ("PPI"), Medical Manager Sales & Marketing,
Inc. (formerly Systems Plus, Inc.) ("SPI"), Medical Manager Southeast, Inc.
(formerly National Medical Systems, Inc.) ("NMS"), Medical Manager RTI, Inc.
(formerly RTI Business Systems, Inc.) ("RTI") and Medical Manager Systems
Management, Inc. (formerly Systems Management, Inc.) ("SMI"). MMC and the
Founding Companies are referred to collectively as the "Company."

         The Company has begun to realize savings by consolidating certain
general sales, administrative and purchasing functions. In addition, the
Company has begun to realize savings from the reduction in interest expense
related to the payment of the Founding Companies' debt and interest income from
the investment of offering proceeds. These savings and interest income are
being partially offset by the costs of being a public company and the
incremental increase in costs related to the Company's new corporate
management. Neither these savings nor the costs associated therewith have been
included in the pro forma statements of operations. As a result, pro
forma results may not be comparable to, or indicative of, future performance.

         As a professional sales and services organization, the Company
responds to the product opportunities and service demands from its clients.
Accordingly, the Company has limited control over the timing and circumstances
under which its products and services are provided. Therefore, the Company can
experience volatility in its operating results from quarter to quarter. The
operating results for any quarter are not necessarily indicative of the results
for any future periods.

PRO FORMA CONSOLIDATED RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996

        REVENUE

         The Company's total revenue for the three months ended March 31, 1997
increased to $13.1 million from $9.7 million for the corresponding period in
1996, an increase of $3.4 million or 35.2%. Revenue from systems for the three
months ended March 31, 1997 increased to $8.2 million (62.5% of total revenue)
from $5.9 million (60.7% of total revenue) for the corresponding period in
1996, an increase of $2.3 million or 39.2%. The increase was primarily due to
increased sales to MSOs, which typically generate greater revenue per system
sold than do systems sold to individual practices. Revenue



                                      10

<PAGE>   11



from maintenance and other sources for the three months ended March 31, 1997
increased to $4.9 million (37.5% of total revenue) from $3.8 million (39.3% of
total revenue) for the corresponding period in 1996, an increase of $1.1
million or 29.0%. The increase was primarily a result of sales of additional
maintenance contracts due to continued growth in the Company's installed base.

        COST OF REVENUE

         The total cost of revenue for the three months ended March 31, 1997
increased to $5.4 million from $3.9 million for the corresponding period in
1996, an increase of $1.5 million or 36.9%. The growth in the cost of revenue
resulted in a slight decline in gross margin to 59.0% for the three months
ended March 31, 1997 from 59.5% for the corresponding period in 1996. Cost of
revenue for systems for the three months ended March 31, 1997 increased to $2.9
million from $1.8 million for the corresponding period in 1996, an increase of
$1.1 million or 59.9%. The increase was due principally to increased equipment
costs for sales to MSOs. Cost of revenue for maintenance and other sources for
the three months ended March 31, 1997 increased to $2.4 million from $2.1
million for the corresponding period in 1996, an increase of $0.3 million or
16.7%. The increase was due principally to additional maintenance contracts and
was partially offset by a greater allocation of overhead to cost of revenue for
systems as revenue from systems increased at a greater rate than that for
maintenance and other.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         Selling, general and administrative expenses increased to $3.1 million
for the three months ended March 31, 1997 from $2.3 million for the
corresponding period in 1996, an increase of $0.8 million or 35.5% but remained
unchanged as a percentage of total revenue (23.3%). The increase was due to
increased selling costs resulting from increased revenue and the hiring of
additional administrative personnel and other costs incurred in conjunction
with the Mergers.

         RESEARCH AND DEVELOPMENT

         Research and development ("R&D") for the three months ended March 31,
1997 increased to $0.8 million (6.1% of total revenue) from $0.7 million (6.9%
of total revenue)for the corresponding period in 1996, an increase of $0.1
million or 19.6%. The increase was due to an approximate 30% increase in R&D
personnel hired to support development activities relating to: (i) a new
release of The Medical Manager incorporating an advanced appointment scheduler
and other enhancements; (ii) graphical user interface and relational database
technologies for use in future versions of The Medical Manager; (iii) the
development of a module for use in the management of multiple physician
practices; (iv) an electronic medical records module; and (v) a module for use
in claims adjudication. Certain of these initiatives were begun in previous
periods, but required additional resources as they reached more advanced stages
of development.

         OTHER INCOME, NET

         Other income of $0.1 million for the three months ended March 31, 1997
resulted primarily from the investment of net proceeds from the Offering.

         PROVISION FOR INCOME TAXES

         Provision for income taxes was $1.4 million for an effective tax rate
of 37.8% of income before income taxes for the three months ended March 31,
1997 compared to $1.0 million for an effective tax rate of 38.5% of income
before income taxes for the corresponding period in 1996. The reduced rate
reflects the effect of nontaxable investment income in the three months ended
March 31, 1997.



                                      11

<PAGE>   12



HISTORICAL CONSOLIDATED RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996

         REVENUE

         The Company's total revenue for the three months ended March 31, 1997
increased to $10.0 million from $3.0 million for the corresponding period in
1996, an increase of $7.0 million or 238.7%. The increase was primarily due to
the inclusion of $6.1 million in revenue of the other Founding Companies in the
first quarter of 1997. Revenue from systems for the three months ended March
31, 1997 increased to $6.2 million (61.9% of total revenue) from $2.2 million
(74.8%) for the corresponding period in 1996, an increase of $4.0 million or
180.5%. The increase was primarily due to the inclusion of $3.6 million in
systems revenue of the other Founding Companies in the first quarter of 1997,
after the elimination of inter-company sales. Revenue from maintenance and
other sources for the three months ended March 31, 1997 increased to $3.8
million (38.1% of total revenue) from $0.7 million (25.2% of total revenue) for
the corresponding period in 1996, an increase of $3.1 million or 411.3%. The
increase was primarily due to the inclusion of $2.5 million in maintenance and
other revenue of the other Founding Companies in the first quarter of 1997 and
$0.5 million in revenue from national interfaces.

         COST OF REVENUE

         The total cost of revenue for the three months ended March 31, 1997
increased to $3.6 million from $0.4 million for the corresponding period in
1996, an increase of $3.2 million or 744.5%. The increase was primarily due to
the inclusion of $3.1 million in cost of revenue of the other Founding
Companies in the first quarter of 1997, after elimination of inter-company debt
The growth in the cost of revenue resulted in a decline in gross margin to
63.6% for the three months ended March 31, 1997 from 85.4% for the
corresponding period in 1996. Cost of revenue for systems for the three months
ended March 31, 1997 increased to $1.8 million from $0.4 million for the
corresponding period in 1996, an increase of $1.4 million or 393.9%. The
increase was primarily due to the inclusion of $1.4 million in cost of revenue
for systems of the other Founding Companies in the first quarter of 1997,
principally for equipment costs for systems sales to MSOs. Cost of revenue for
maintenance and other sources for the three months ended March 31, 1997
increased to $1.9 million from $0.1 million for the corresponding period in
1996, an increase of $1.8 million. The increase was primarily due to the
inclusion of $1.7 million in cost of revenue for maintenance and other sources
of the other Founding Companies in the first quarter of 1997.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         Selling, general and administrative expenses increased to $2.3 million
for the three months ended March 31, 1997 (23.3% of total revenue) from $0.3
million (9.8% of total revenue) for the corresponding period in 1996, an
increase of $2.0 million or 706.9%. The increase was primarily due to the
inclusion of $1.6 million in selling, general and administrative expenses of
the other Founding Companies and $0.3 million in administrative expenses
incurred principally in conjunction with the Mergers.

         RESEARCH AND DEVELOPMENT

         R&D for the three months ended March 31, 1997 increased to $0.8
million (7.8% of total revenue) from $0.6 million (19.4% of total revenue) for
the corresponding period in 1996, an increase of $0.2 million or 35.2%. The
increase was due to an approximate 30% increase in R&D personnel hired to
support development activities relating to: (i) a new release of The Medical
Manager incorporating an advanced appointment scheduler and other enhancements;
(ii) an electronic medical records module; and (iii) an module for use in the
management of multiple physician practices. Certain of these initiatives




                                      12

<PAGE>   13



were begun in previous periods, but required additional resources as they
reached more advanced stages of development.

         OTHER INCOME

         Other income of $0.1 million for the three months ended March 31, 1997
resulted primarily from the investment of the net proceeds from the Offering.

         PROVISION FOR INCOME TAXES

         The Company's provision for income taxes increased to $0.6 million for
the three months ended March 31, 1997, net of a deferred tax benefit of $0.4
million related to the termination of the S Corporation status of PPI effective
February 4, 1997, and gives effect to PPI's income being taxed to its
stockholder prior to such termination and the effect of nontaxable investment
income.

LIQUIDITY AND CAPITAL RESOURCES

         The Company has financed its growth principally through proceeds from
the Offering.

         Net cash provided by operating activities was $0.3 million for the
three months ended March 31, 1997. Included in net cash provided by operating
activities for the three months ended March 31, 1997 is a reduction of
approximately $0.7 million in accounts payable and accrued liabilities of the
other Founding Companies that were assumed in connection with the Mergers.

         On February 4, 1997, the Company completed the Offering of 6,000,000
shares of Common Stock, resulting in net proceeds of approximately $58.4
million. Approximately $46.9 million of the net proceeds were used to pay the
cash portion of the purchase price for the Founding Companies.

         MMC and each of the Founding Companies had separate banking
relationships through February 4, 1997. Effective February 5, 1997, these
separate banking relationships were consolidated into a single banking
relationship with Barnett Bank of Tampa. The Company is negotiating a line of
credit of $30 million with Barnett Bank of Tampa to be used for working capital
and other general corporate purposes, including future acquisitions.

         The Company believes the net proceeds for the sale of Common Stock in
the Offering, together with existing sources of liquidity and funds generated
from operations, will provide adequate cash to fund its anticipated cash needs
at least through the next six months.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         Pursuant to the General Instructions to Item 305 of Regulation S-K,
the quantitative and qualitative disclosure requirements of this Item 3 and
Item 305 of Regulation S-K are inapplicable to the Company at this time.




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<PAGE>   14



                          PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         Reference is made to the section headed "Legal Proceedings" in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1996, which was filed with the Securities and Exchange Commission on April 8,
1997, for a description of material legal proceedings. There have been no
material developments in the Company's legal proceedings since the date on
which the referenced Annual Report on Form 10-K was filed.

ITEM 2.  CHANGE IN SECURITIES.

         Not Applicable

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         Not applicable

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         Not Applicable

ITEM 5.  OTHER INFORMATION.

         Not Applicable

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

         (a) Exhibits.

             The following document is filed as an exhibit to this Current
             Report on Form 8-K.

             27.1     Financial Data Schedule

         (b) Reports on Form 8-K.

             A Current Report on Form 8-K was filed with the Securities and
             Exchange Commission on April 8, 1997 in connection with the
             acquisition by the Company of the Founding Companies on
             February 4, 1997.



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<PAGE>   15


                                   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.

                                      MEDICAL MANAGER CORPORATION




Date: May 15, 1997

                                      By: /s/ Lee A. Robbins
                                      -----------------------------------------
                                      Lee A. Robbins
                                      Vice President and Chief Financial Officer




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