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

                                   FORM 10-Q

(Mark One)
[X]   Quarterly report pursuant to section 13 or 15(d) of the Securities
      Exchange Act of 1934
      For the quarter period ended September 30, 1997 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:  0-27162

                         NATIONAL SURGERY CENTERS, INC.

                 Delaware                                      36-3549627
(State or other jurisdiction of incorporation               (I.R.S. Employer
             or organization)                              Identification No.)  
                                                             
30 South Wacker Drive, Suite 2302, Chicago, Illinois             60606
      (Address of principal executive offices)                 (Zip Code)

                                 (312) 655-1400
               Registrants telephone number, including area code


--------------------------------------------------------------------------------
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.  [X] Yes  [_] No

                     APPLICABLE ONLY TO CORPORATE ISSUERS:
     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

     Common stock, par value $.01; 18,488,410 shares outstanding at November 11,
1997
<PAGE>

                         National Surgery Centers, Inc.

                                   FORM 10-Q

                                     INDEX
<TABLE>
<CAPTION>


PART I    FINANCIAL INFORMATION                                        PAGE
          ---------------------                                        ----
<S>                                                                   <C>

Item 1.   Financial Statements

          Consolidated Balance Sheets as of September 30, 1997 and
          December 31, 1996.........................................   3

          Consolidated Statements of Income for the Three and Nine
          Month Periods Ended September 30, 1997 and 1996...........   4

          Consolidated Statements of Cash Flows for the
          Nine Month Periods Ended September 30, 1997 and 1996......   5

          Notes to Consolidated Financial Statements................   6

Item 2    Management's Discussion and Analysis of the Consolidated
          Financial Condition and Results of Operations.............   7

PART II   OTHER INFORMATION
          -----------------
Item 1    Legal Proceedings.........................................   None

Item 2    Changes in Securities.....................................   None

Item 3    Defaults Upon Senior Securities...........................   None

Item 4    Submission of Matters to a Vote of Security Holders.......   None

Item 5    Exhibits and Reports on Form 8-K..........................   11

SIGNATURES..........................................................   12
</TABLE>


                                     Page 2
<PAGE>
 
<TABLE>
<CAPTION>

CONSOLIDATED BALANCE SHEETS
(in thousands, except shares)
                                                                        September 30,  December 31,
                                                                            1997          1996
                                                                        ------------   -----------
<S>                                                                     <C>            <C>        
ASSETS
Current assets:
 Cash and cash equivalents                                              $     13,995   $     9,721
 Short-term investments                                                       13,368        41,614
 Accounts receivable (less allowance for uncollectible accounts                          
  of $4,555 and $1,723)                                                       18,160        13,223
 Inventories                                                                   3,577         2,548
 Prepaid expenses                                                              1,242         2,383
 Other current assets                                                          1,022           724
                                                                        ------------   -----------
                                                                              51,364        70,213
                                                                        ------------   -----------
Property and equipment                                                        52,804        44,167
 Less accumulated depreciation and amortization                              (14,720)      (10,805)
                                                                        ------------   -----------
                                                                              38,084        33,362
                                                                        ------------   -----------
Other assets:
 Excess of purchase price over net assets acquired (less accumulated
  amortization of $2,939 and $2,045)                                          70,783        32,181
 Deferred income taxes                                                         1,628         3,074
 Other long-term assets                                                        3,470         3,422
                                                                        ------------   -----------
                                                                              75,881        38,677
                                                                        ------------   -----------
                                                                            $165,329   $   142,252
                                                                        ============   ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
 Current installments of long-term debt                                 $      2,260   $     3,464
 Accounts payable and accrued expenses                                         8,187         6,781
                                                                        ------------   -----------
                                                                              10,447        10,245
                                                                        ------------   -----------
Long-term debt, less current installments:
 Long-term debt                                                               11,221         6,353
 Convertible notes                                                                97           637
                                                                        ------------   -----------
                                                                              11,318         6,990
                                                                        ------------   -----------
Other long-term liabilities                                                      783           703
Minority interests                                                            10,392         6,645
Shareholders equity:
 Preferred stock, $.01 par value; authorized 10,000,000 shares; no
  shares issued and outstanding                                                    -             -
 Non-voting common stock, $.01 par value; authorized 10,000,000
  shares; issued and outstanding 654,313 shares in 1996                            -             6
 Common stock, $.01 par value; authorized 40,000,000 shares;
  issued and outstanding 18,327,220 shares in 1997 and 11,278,995
  shares in 1996                                                                 183           113
 Additional paid-in-capital                                                  155,958       150,314
 Accumulated deficit                                                         (23,752)      (32,764)
                                                                        ------------   -----------
                                                                             132,389       117,669   
                                                                        ------------   -----------
                                                                        $    165,329   $   142,252
                                                                        ============   ===========
</TABLE>
         See accompanying Notes to Consolidated Financial Statements.


                                    Page 3
<PAGE>
 
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)

<TABLE>
<CAPTION>
 
                                                       Three Months Ended             Nine Months Ended  
                                                         September 30,                  September 30,    
                                                      -------------------            -------------------  
                                                        1997       1996                1997       1996
                                                      --------   --------            --------   -------- 
<S>                                                   <C>        <C>                 <C>        <C>
 
Net revenue                                            $26,933    $20,101             $73,295   $56,012
Costs and expenses:
  Operating expenses                                    16,704     13,305              45,852    37,070
  General and administrative expenses                    1,214        942               3,360     2,565
  Depreciation and amortization expense                  1,915      1,624               5,243     4,304
                                                       -------    -------             -------   -------
     Total costs and expenses                           19,833     15,871              54,455    43,939
                                                       -------    -------             -------   -------
Operating income                                         7,100      4,230              18,840    12,073
Other (income) and expenses:
  Interest expense                                         342        714                 688     2,011
  Interest income                                         (360)       (84)             (1,223)     (303)
  Minority interests                                     2,135        880               5,111     2,397
  Other, net                                               (31)       (93)               (117)     (246)
                                                       -------    -------             -------   -------
     Total other expenses                                2,086      1,417               4,459     3,859
                                                       -------    -------             -------   -------
Income before income taxes                               5,014      2,813              14,381     8,214
Provision for income taxes                               1,880      1,109               5,369     3,217
                                                       -------    -------             -------   -------
Net income                                             $ 3,134    $ 1,704             $ 9,012   $ 4,997
                                                       =======    =======             =======   =======
 
Income per common share:
  Primary                                                $0.17      $0.12               $0.48     $0.36
  Fully diluted                                          $0.17      $0.12               $0.48     $0.35
 
Weighted average number of common and
 common equivalent shares outstanding:  
  Primary                                               18,797     14,126              18,714    13,854
  Fully diluted                                         18,826     14,682              18,764    14,633
</TABLE>

         See accompanying Notes to Consolidated Financial Statements.


                                    Page 4
<PAGE>
 

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

<TABLE>
<CAPTION>
                                                                    Nine Months Ended
                                                                      September 30,  
                                                                  --------------------
                                                                    1997       1996     
                                                                    ----       ----
<S>                                                               <C>        <C>   
Operating activities:
  Net income                                                      $  9,012   $  4,997
  Adjustments to reconcile net income to net cash 
   provided by operating activities: 
     Depreciation and amortization expense                           5,243      4,304
     Minority interests                                              5,111      2,397
     Distribution to minority interests                             (3,870)    (1,961)
     Deferred income taxes                                           1,318        (45)
     Tax benefit associated with stock options                         639        -
Change in assets and liabilities, net of entities acquired:
  Accounts receivable                                                 (394)      (785)
  Inventories                                                         (272)       (43)
  Prepaid expenses                                                   1,207       (114)
  Other current assets                                                (213)       338
  Other long-term assets                                              (406)      (693)
  Accounts payable and accrued expenses                                615       (833)
  Other                                                                225       (214)
                                                                  --------   --------
     Net cash provided by operating activities                      18,215      7,348
                                                                  --------   --------
Investing activities:
  Payments for entities acquired, net of cash acquired             (38,810)   (13,850)
  Investments in minority ownerships                                  (450)    (1,500)
  Purchases of property and equipment                               (3,278)    (3,498)
  Proceeds from sale of short-term investments                      28,246      7,940
  Proceeds from sale of property and equipment                         536      1,039
  Proceeds from sale of partnership interests                        1,800        386
                                                                  --------   --------
     Net cash used in investing activities                         (11,956)    (9,483)
                                                                  --------   --------
Financing activities:
  Payments on long-term debt                                        (2,379)    (3,706)
  Proceeds from issuance of common stock                               -          255
  Proceeds from issuance of warrants and options                       394        100
                                                                  --------   --------
     Net cash used in financing activities                          (1,985)    (3,351)
                                                                  --------   --------
Net increase (decrease) in cash and cash equivalents                 4,274     (5,486)
Cash and cash equivalents, beginning of period                       9,721     14,653
                                                                  --------   --------
Cash and cash equivalents, end of period                          $ 13,995   $  9,167
                                                                  ========   ========
 
NON-CASH TRANSACTIONS:
  Long-term debt issued in acquisitions and contingent payments   $    -     $    240
  Common stock issued upon conversion of convertible debt              887      1,380
  Common stock issued in acquisitions                                3,600        -
  Liabilities assumed in acquisitions                                9,080     11,033
  Capital lease obligations                                             81        204
  Issuance of warrants                                                 188        -  
 
SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid                                                   $    583   $  1,994
  Income taxes paid                                                  2,640      3,212
</TABLE>


         See accompnaying Notes to Consolidated Financial Statements.


                                    Page 5


<PAGE>
 
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Summary Accounting Policies

     The Company - National Surgery Centers, Inc. and subsidiaries (collectively
the "Company") acquires, develops and manages ambulatory surgery centers. Many
of the Company's surgery centers are operated in partnership with physicians and
other health care providers.

     The accompanying unaudited interim financial statements of the Company have
been prepared in accordance with generally accepted accounting principles for
interim financial information. In the opinion of management, all adjustments
(consisting only of normal recurring adjustments) have been made which are
necessary for a fair presentation of the financial position, results of
operations, and cash flows for the interim periods presented. The interim
statements presented herein do not include all disclosures normally provided in
annual financial statements.

     Principles of Consolidation - The consolidated financial statements include
all accounts of the Company and its wholly-owned subsidiaries and controlled
partnerships. All significant intercompany balances and transactions have been
eliminated in consolidation.

     Common Share Data - Primary income per common and common equivalent share
and income per common and common equivalent share assuming full dilution are
computed using the weighted average number of shares outstanding adjusted for
the incremental shares attributable to outstanding options and warrants to
purchase common stock. On a fully-diluted basis, both income and weighted
average number of shares outstanding are adjusted to assume the conversion of
convertible notes, when such notes are dilutive.

     Earnings Per Share - The Company will adopt SFAS No. 128 "Earnings per
Share", effective December 15, 1997. SFAS No. 128 requires the calculation of
basic earnings per share which is computed by dividing net income by the
weighted average number of shares of common stock outstanding during the period
and diluted earnings per common share which is computed using the weighted
average number of share of common stock, common stock equivalents and any other
dilutive securities. The effects of SFAS No. 128 will not have a material impact
on earnings per share as report and, when permitted, the Company will restate
the reported earnings per share.

     Stock Exchange - Effective August 29, 1997, the Company effected a 3-for-2
stock split in the form of a 50% stock dividend. Accordingly, all references in
these unaudited interim financial statements to shares, average number of shares
outstanding and per share amounts have been restated, when applicable, to
reflect this stock split.


Note 2 - Acquisitions

     Purchases - During January, June, and August 1997, the Company acquired
five multi-specialty surgery centers. The purchase price was $38.8 million in
cash and the issuance of 184,932 shares of the Company's common stock at $19.47
per share which resulted in $39.5 million of the purchase price being recorded
as goodwill. Also, during January, February, April, May and November 1996, the
Company acquired four multi-specialty surgery centers and two companies which
operated specialty endoscopy centers. The following unaudited results of
operations give effect to the operations of the entities acquired during 1997
and 1996 as if these respective transactions had occurred as of the first day of
1996. The pro forma results of operations do not purport to represent what the
Company's results would have been had the transactions in fact occurred at the
beginning of the periods presented or to project the Company's results of
operations in any future period.


                                    Page 6
<PAGE>
 
<TABLE>
<CAPTION>
                                              Three Months Ended         Nine Months Ended   
                                                September 30,               September 30, 
                                              ------------------         ------------------ 
                                                1997      1996           1997       1996     
                                              --------  --------       --------    ------- 
                                              (in thousands, except per share amounts)
<S>                                           <C>       <C>            <C>         <C> 
     Net revenue                              $28,201   $24,345        $85,408     $74,465
     Net income                                 3,202     2,240         10,616       6,522              
     Income per common share: 
          Primary                             $   .17   $   .16        $   .56     $   .46
          Fully diluted                           .17       .15            .56         .45
</TABLE>

     The above pro forma operating results include adjustments to conform
accounting policies and excludes general and administrative expenses of one of
the specialty endoscopy companies.

      MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS

Overview

     The Company's growth has resulted primarily from the acquisition and
development of ambulatory surgery centers. The Company operates a network of 36
ambulatory surgery centers, including four centers in which the Company has a
minority ownership position. The Company's acquisitions have been funded with
cash, debt, convertible notes and shares of common stock. Additionally, the
Company continues to increase surgical capacity in existing centers by adding
operating rooms and continues to expand its ability to perform higher acuity and
more complex cases by offering extended recovery in fourteen of its twenty-five
multi-specialty centers.

     During the nine-month period of 1997, the Company continued to execute its
strategy for growth, in addition to other activities which continue to enhance
its financial condition. Some of the key activities during the nine-month period
of 1997 included:

 . Acquired five multi-specialty surgery centers.
 . Declared a 3-for-2 stock split for all holders of record of its common stock
  on August 15, 1997, which was effected as a stock dividend on August 29, 1997.
 . Converted $887,000 of its convertible notes into 61,811 shares of common stock
  and redeemed $24,000 principal of such notes.
 . Prepaid $1.2 million in debt with proceeds from the October 1996 public
  offering.

     During 1996, the Company experienced significant growth through acquisition
and other activities which impact the comparability of operating results between
the current and comparable prior year periods. These activities included:

 . Acquired five multi-specialty surgery centers (including one center in which
  it acquired a minority interest) and two companies which operated specialty
  endoscopy centers.
 . Declared a 3-for-2 stock split for all holders of record of its common stock
  on May 15, 1996, which was effected as a stock dividend on May 31, 1996.
 . Converted $6,699,000 of its convertible notes into 768,059 shares of common
  stock and redeemed $71,000 principal of such notes.
 . Completed a public offering in October for 3.64 million shares of common stock
  at $16.17 per share. In conjunction with this offering, the Company prepaid
  $9.2 million in debt.
 . Divested its interest in two centers, including one multi-specialty and one
  specialty endoscopy center.

     Because of the financial impact of the Company's recent acquisitions and
developments and other financial related activities, it is difficult to make
meaningful comparisons between the Company's financial statements for the three
and nine-month periods of 1997 and the comparable periods in 1996. In addition,
due to the limited number of operated surgery centers, each additional center
acquired or developed can affect the overall operating margin of the Company.
Upon the acquisition of a surgery center, the Company has typically implemented
certain steps to improve operating margins. The impact of such actions and of
other activities to improve operating margins may not occur immediately.
Consequently, the financial performance of an acquired surgery center may affect
overall operating margins in the


                                    Page 7
<PAGE>
 
near-term. As the Company makes additional surgery center acquisitions or
completes the development of de novo facilities, the Company expects that this
effect will be mitigated by the expanded financial base of existing operating
activities.

     The Company's principal source of revenue is a facility fee charged for
surgical procedures performed in its surgery centers. This fee varies depending
on the procedure performed, but usually includes all charges for operating room
usage, special equipment usage, supplies, recovery room usage, nursing staff and
medications. Facility fees do not include the charges of the patients' surgeons,
anesthesiologists or attending physicians, which are billed directly by such
physicians. For those surgery centers providing extended recovery care, an
additional fee is typically charged for an overnight stay. This fee generally
includes a flat fee for post-operative care and may include itemized amounts for
medications and other supplies.

     The Company receives payments for services rendered to patients from
private insurers, HMOs, PPOs, the patients directly and governmental payors,
including Medicare and Medicaid. In many instances, the Company has agreed with
certain payors to provide services at discounted prices. The Company charges for
services rendered on a fee-for-service basis and may in the future enter into
capitation agreements with payors whereby the Company may share some of the
financial risk of delivering health care services. The sources and amounts of
the Company's revenues derived from its surgery centers are determined by a
number of factors, including the number of patient procedures performed, the mix
of patient procedures and the rates of reimbursement among payor categories.
Generally, private insurance reimbursement is greater than HMO/PPO reimbursement
which, in turn, is greater than Medicare and Medicaid reimbursement.

<TABLE>
<CAPTION>

Results of Operations
                                           Three Months Ended                  Nine Months Ended
                                             September 30,                       September 30,
                                          --------------------               ---------------------
                                            1997         1996                  1997         1996
                                          --------     --------              --------     --------
<S>                                       <C>          <C>                  <C>           <C>
                                       (percentage of net revenue)
Net revenue                                100.0%        100.0%               100.0%         100.0%
Costs and expenses:
 Operating expenses                         62.0          66.2                 62.6            66.2
 General and administrative expenses         4.5           4.7                  4.6             4.6
 Depreciation and amortization expense       7.1           8.1                  7.1             7.6
                                          ------       -------                -----          ------
  Total costs and expenses                  73.6          79.0                 74.3            78.4
                                          ------       -------                -----          ------
Operating income                            26.4          21.0                 25.7            21.6
                                          ------       -------                -----          ------
Other (income) and expenses:
 Interest expense                            1.3           3.5                  0.9             3.6
 Interest income                            (1.3)         (0.4)                (1.7)           (0.5)
 Minority interests                          7.9           4.4                  7.0             4.3
 Other, net                                 (0.1)         (0.5)                (0.1)           (0.4)
                                          ------       -------                -----          ------
  Total other expenses                       7.8           7.0                  6.1             7.0
                                          ------       -------                -----          ------
Income before income taxes                  18.6          14.0                 19.6            14.6
Provision for income taxes                   7.0           5.5                  7.3             5.7
                                          ------       -------                -----          ------
Net income                                  11.6           8.5                 12.3             8.9
                                          ======       =======                =====          ======
</TABLE>


Three Months Ended September 30, 1997 and 1996

          Net Revenue.  Net revenue is net of provisions for contractual
adjustments and doubtful accounts.  Net revenue increased 34.0% to $26.9 million
in 1997 from $20.1 million in 1996.  Same center net revenue increased $1.4
million or 9.1% due to a 6.3% increase in cases to 16,988 combined with a 2.6%
increase in net revenue per case to $1,014 from $988.  Overall net revenue per
case increased 11.0% to $977 in 1997 from $880 in 1996.  Separately, net revenue
per case was $1,097 for the multi-specialty centers and $526 for the specialty
endoscopy centers.

          Operating Expenses.  Operating expenses include salaries and benefits,
drugs and medical supplies, utilities, marketing, maintenance costs and rent
expense of the centers.  Operating expenses increased 25.5% to $16.7 million in
1997 from $13.3 million in 1996 primarily as a result of the addition of multi-
specialty centers acquired since the

                                     Page 8
<PAGE>
 
third quarter of 1996.  As a percentage of net revenue, operating expenses
decreased to 62.0% in 1997 from 66.2% in 1996 as a result of continued expense
efficiencies resulting from same-center growth and effects of recently acquired
surgery centers.

     General and Administrative Expenses. General and administrative expenses
include only corporate-level expenses and do not include any center-level
administrative expenses. General and administrative expenses increased 28.9% to
$1.2 million in 1997 from $942,000 in 1996. As a percentage of net revenue,
general and administrative expenses decreased slightly as a percentage of net
revenue to 4.5% in 1997 from 4.7% in 1996. The increase in terms of overall
dollars is primarily attributable to the hiring of additional personnel to
handle the management of centers acquired or developed as the Company continues
to expand its network of centers.

     Depreciation and Amortization Expense. Depreciation and amortization
expense increased 17.9% to $1.9 million in 1997 from $1.6 million in 1996. The
increase in depreciation and amortization expense resulted primarily from the
addition of centers acquired since the third quarter of 1996.

     Interest Expense. Interest expense decreased 52.1% to $342,000 in 1997 from
$714,000 in 1996. The decrease in interest expense was primarily the result of
the conversion or redemption of $7.6 million of convertible notes during the
second half of 1996 and in the first nine months of 1997, and the repayment of
$10.4 million of capital leases and acquisition debt with proceeds from the
Company's October 1996 public offering.

     Interest Income. Interest income increased more than threefold to $360,000
in 1997 from $84,000 in 1996. The increase on interest income reflects interest
earned on cash, cash equivalents and short term investments from remaining
proceeds of the Company's October 1996 public offering.

     Minority Interests. Minority interests include the limited partners'
ownership share in the earnings of the operating center partnerships. Minority
interests increased 142.6% to $2.1 million in 1997 from $880,000 in 1996. The
increase in minority interests resulted primarily from improved operating
performance at existing surgery centers and the effects resulting from the
acquisition of centers since the third quarter of 1996, which are operated in
partnership with physicians.

     Provision for Income Taxes. Provision for income taxes increased to $1.9
million in 1997 from $1.1 million in 1996. The effective tax rate decreased to
37.5% in 1997 from 39.4% in 1996 due primarily to the effects of tax-exempt
interest earned during 1997 from cash, cash equivalents and short-term
investments.

Nine Months Ended September 30, 1997 and 1996

     Net Revenue. Net revenue increased 30.9% to 73.3 million in 1997 from $56.0
million in 1996. Same center net revenue increased $5.3 million or 11.2% due to
a 8.7% increase in cases to 51,439 combined with a 2.2% increase in net revenue
per case to $1,023 from $1,001. Overall net revenue per case increased 2.4% to
$934 in 1997 from $912 in 1996. Separately, net revenue per case was $1,046 for
the multi-specialty centers and $520 for the specialty endoscopy centers.

     Operating Expenses. Operating expenses increased 23.7% to $45.9 million in
1997 from $37.1 million in 1996 primarily as a result of the addition of multi-
specialty and specialty endoscopy centers acquired since the beginning of 1996.
As a percentage of net revenue, operating expenses decreased to 62.6% in 1997
from 66.2% as a result of continued expense efficiencies resulting from same-
center growth.

     General and Administrative Expenses. General administrative expenses
increased 31.0% to $3.4 million in 1997 from $2.6 million in 1996. As a
percentage of net revenue, general and administrative expenses remained constant
at 4.6% in 1997 and 1996. The increase in terms of overall dollars is primarily
attributable to the hiring of additional personnel to handle the management of
centers acquired or developed as the Company continues to expand its network of
centers.

     Depreciation and Amortization Expense.  Depreciation and amortization
expense increased 21.8% to $5.2 million in 1997 from $4.3 million in 1996.  The
increase in depreciation and amortization expense resulted primarily from the
addition of centers acquired since the beginning of 1996.

                                     Page 9
<PAGE>
 
     Interest Expense.  Interest expense decreased 65.8% to $688,000 in
1997 from $2.0 million in 1996.  The decrease in interest expense was primarily
the result of the conversion of $7.6 million of convertible notes during 1996
and the first nine months of 1997, and the repayment of $10.4 million of capital
leases and acquisition debt with proceeds from the Company's October 1996 public
offering.

     Interest Income.  Interest income increased more than threefold to $1.2
million in 1997 from $303,000 in 1996. The increase in interest income reflects
interest earned on cash, cash equivalents, and short-term investments from
remaining proceeds of the Company's October 1996 public offering.

     Minority Interests.  Minority interests increased 113.2% to $5.1 million in
1997 from $2.4 million in 1996. The increase in minority interests resulted
primarily from improved operating performance at existing surgery centers and
the effects resulting from the acquisition of centers since the beginning of
1996 which are operated in partnership with physicians.

     Provision for Income Taxes.  Provision for income taxes increased to $5.4
million in 1997 from $3.2 million in 1996. The effective tax rated decreased to
37.3% in 1997 from 39.2% in 1996 due primarily to the effects of tax-exempt
interest earned during 1997 from cash, cash equivalents and short-term
investments.

Seasonality

     The Company's business experiences some degree of seasonality because
patients have discretion in scheduling elective surgery. The first quarter tends
to be lower due to beginning of the year deductibles while the third quarter
reflects the effects of vacations taken both by patients and physicians.
Although the Company's growth and development of centers may obscure the effects
of seasonality in the Company's financial results, the Company's first and third
quarters generally reflect lower net revenue and operating income margins on a
same center basis when compared to the Company's second and fourth quarters.

Liquidity and Capital Resources

     At September 30, 1997, the Company had working capital of $40.9 million
including cash, cash equivalents and short-term investments of $27.4 million.
The Company's cash flow from operations increased to $18.2 million for the nine
months ended September 30, 1997 from $7.3 million in 1996. The Company's cash
flow from operations combined with proceeds from sale of short-term investments
of $28.2 million and existing cash and cash equivalents were used primarily to
finance acquisitions and contingency payments of $38.8 million, capital
expenditures of $3.3 million, and repayment of long-term debt of $2.4 million,
including $1.2 million of which was early retirement of debt.

     The Company expects that its principal use of funds in the near future will
be in connection with the acquisition and development of surgery centers,
working capital requirements, debt repayments and purchases of property and
equipment. The Company expects that cash, cash equivalents, short-term
investments, cash generated from operations and available credit borrowings will
be adequate to provide for the Company's cash requirements for at least the next
twelve months, unless the rate of acquisitions significantly increases. No
assurances can be given that cash and borrowings will be sufficient to provide
for the Company's cash requirements beyond the next twelve months.

     The Company's credit agreement provides for revolving and term loans of up
to $20.0 million, to be used by the Company for acquisitions and development of
surgery centers and related businesses. As of September 30, 1997, no amount was
outstanding under the credit agreement. Loans under the credit agreement are
secured by substantially all the assets of the Company (including the capital
stock or partnership units of the Company's subsidiaries) and matures on June
30, 2000. Loans under the credit agreement are denominated at the Company's
option as either Eurodollar Tranches (loans bearing interest at a rate of 1.25%
above the London Interbank Offered Rate) or Base Rate Tranches (loans bearing
interest at 0.25% above the prime rate for U.S. commercial loans) subject to
adjustments in certain circumstances.

                                    Page 10
<PAGE>

 
Item 5.  Exhibits and Reports on Form 8-K

         a.  Exhibits
             The exhibits to this report are listed in the Exhibit Index set
             forth elsewhere herein.

         b.  Reports on Form 8-K
             The registrant did not file a Form 8-K in the period.

                                    Page 11
<PAGE>
 
                                   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.


                        NATIONAL SURGERY CENTERS, INC.
                                 (Registrant)


Date: November 14, 1997                         /s/ E. Timothy Geary
      -----------------                  ------------------------------------
                                                    E. Timothy Geary
                                                    President and Chief
                                                    Executive Officer
 
                                                            
                                                /s/ Bryan S. Fisher
                                        -------------------------------------   
                                                    Bryan S. Fisher
                                                    Vice President and
                                                    Chief Financial Officer

                                    Page 12
<PAGE>
 

                                 Exhibit Index



          Number and Description of Exhibit*
    
                2   None
               
                4   None
               
               10   None
               
               11   Computation of Income Per Common Share
               
               12   None
               
               15   None
               
               18   None
               
               19   None
               
               22   None
               
               23   None
               
               24   None
               
               27   Schedule of Summary Financial Information

               99   None

----------------------------------------

* Exhibits not listed are inapplicable.

                                    Page 13