<PAGE>
 
                                   FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549


(X)      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                          SECURITIES EXCHANGE ACT OF 1934

         For the quarter period ended April 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
                                    0-14003
                                -----------


                          ROTECH MEDICAL CORPORATION
                          --------------------------
            (Exact name of Registrant as specified on its Charter)
<TABLE>
<S>                                                                <C>
              Florida                                                        59-2115892
---------------------------------------                             -----------------------------
(State of jurisdiction of incorporation                                    (I.R.S. Employer
            or organization)                                              Identification No.)
                                                                   
4506 L.B. McLeod Road, Suite F, Orlando, Florida                         32811
----------------------------------------------------------------------------------------------------------
(Address of principal executive offices)                               (Zip Code)
                                                                   
Registrant's telephone number, including area code:                    (407) 841-2115
----------------------------------------------------------------------------------------------------------
</TABLE>

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 and 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
                                          ---       

Indicate the number of shares outstanding of each class of issuer's classes of
common stock as of June 12, 1997: 26,171,792
<PAGE>
 
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
------------------------------------------------------------------------------
Index

<TABLE>
<CAPTION>

                                                                                        PAGE
                                                                                        ----
<S>                       <C>                                                           <C> 
Part I.                   Financial Information

          Item 1.         Financial Statements

                          Condensed Consolidated Balance Sheets,
                          Interim at April 30, 1997 and Year End at July
                          31, 1996                                                        1

                          Condensed Consolidated Interim Statements of
                          Income for the Three Months and Nine Months
                          Ended April 30, 1997 and 1996                                   2

                          Condensed Consolidated Interim Statements of
                          Shareholders' Equity for the Nine Months Ended
                          April 30, 1997 and 1996                                         3

                          Condensed Consolidated Interim Statements of
                          Cash Flows for the Nine Months Ended April 30,
                          1997 and 1996                                                   4

                          Notes to Condensed Consolidated Interim
                          Financial Statements                                           5-8

          Item 2.         Management's Discussion and Analysis of
                          Financial Condition and Results of Operations                  9-10

Part II.                  Other Information                                               11

Signature                                                                                 12

</TABLE>
<PAGE>
 
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
Condensed Consolidated Balance Sheet

<TABLE>
<CAPTION>
                                                                             April 30              July 31
                                                                               1997                  1996
                                                                         ---------------------------------------
                                 ASSETS                                     (Unaudited)
<S>                                                                       <C>                  <C>
Current Assets:
         Cash                                                             $      8,738,227       $   6,438,760
         Accounts Receivable:
              Trade, less allowance for doubtful accounts                      114,134,789           83,486,610
              Other                                                              2,743,490            3,468,193
         Inventories                                                            20,151,931           15,191,011
         Prepaid Assets                                                          3,710,114            3,883,830
                                                                         ------------------    -----------------
              Total Current Assets                                             149,478,551          112,468,404

Property and equipment, less accumulated depreciation                          114,846,823           85,414,544
Intangible assets, less accumulated amortization                               252,433,465          168,101,082
Other assets                                                                     1,807,938            8,630,288
                                                                         ------------------    -----------------

       TOTAL ASSETS                                                           $518,566,777       $  374,614,318
                                                                         ==================    =================

                  LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
         Accounts payable, accrued expenses and other liabilities             $ 24,524,388          $24,330,808
         Notes payable to banks                                                162,013,900           52,055,008
         Deferred income taxes                                                     135,800               75,299
                                                                         ------------------    -----------------
               Total Current Liabilities                                       186,674,088           76,461,115

Deferred Income Taxes                                                           17,356,478           11,831,155

Convertible Subordinated Debentures                                            110,000,000          110,000,000

Redeemable Common Stock                                                          3,322,175            1,646,933

Shareholders' Equity:
         Common Stock, par value $.0002 per share, 50,000,000
            shares authorized, 23,789,399 shares in 1997 and
            23,303,586 shares in 1996 issued and outstanding                         4,766                4,669
         Treasury stock, at cost                                                  (814,535)            (814,535)
         Additional paid-in capital                                            127,403,001          122,757,377
         Retained earnings                                                      74,620,804           52,727,604
                                                                         ------------------    -----------------
                                                                               201,214,036          174,675,115
                                                                         ------------------    -----------------
       TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                             $518,566,777         $374,614,318
                                                                         ==================    =================
</TABLE>

Note:    The consolidated balance sheet at July 31, 1996 has been condensed from
         the audited financial statements at that date.



See notes to condensed consolidated interim financial statements.



                                       1

<PAGE>
 
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
Condensed Consolidated Interim Statements of Income
<TABLE>
<CAPTION>


                                                        Three Months Ended                         Nine Months Ended
                                                   April 30             April 30             April 30             April 30
                                                     1997                 1996                 1997                 1996
                                               -----------------    -----------------    -----------------    -----------------
                                                            (Unaudited)                               (Unaudited)
<S>                                            <C>                  <C>                  <C>                  <C>
Operating revenue                                  $109,431,604          $72,983,865         $297,574,404         $179,566,243

Cost and Expenses:
     Cost of revenue                                 26,477,895           20,281,706           77,090,828           49,312,209
     Selling, general and administrative             55,031,932           34,862,199          145,710,671           86,602,076
                                                     ----------           ----------          -----------           ----------
Income before interest, taxes, depreciation
   and amortization                                  27,921,777           17,839,960           74,772,905           43,651,958
                                                     ----------           ----------           ----------           ----------

     Depreciation and amortization                   11,027,259            7,739,381           30,343,973           17,501,895
     Interest                                         3,649,048            1,761,293            9,214,066            3,098,014
                                               -----------------    -----------------    -----------------    -----------------

Income before income taxes                           13,245,470            8,339,286           35,214,866           23,052,049

Income tax expense                                    4,979,163            2,897,933           13,321,666            8,356,368
                                               -----------------    -----------------    -----------------    -----------------

                 Net Income                          $8,266,307          $ 5,441,353          $21,893,200         $ 14,695,681
                                               =================    =================    =================    =================

Net income per share:
     Primary                                              $0.31                $0.22                $0.84                $0.60
     Fully diluted                                        $0.30                $0.22                $0.81                $0.60
Weighted average number of shares outstanding:
     Primary                                         26,580,443           24,927,156           26,186,355           24,353,982
     Fully diluted                                   31,193,500           25,299,450           30,728,710           24,679,950

</TABLE>


See notes to consolidated interim financial statements.

                                       2
<PAGE>

ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
Condensed Consolidated Interim Statements of Shareholders' Equity

<TABLE>
<CAPTION>
                                            Common Stock                             Additional
                                      --------------------------      Treasury        Paid-in          Retained
                                          Shares       Amount          Stock          Capital          Earnings
                                      ------------------------------------------------------------------------------
                                                                    (Unaudited)

<S>                                   <C>              <C>            <C>            <C>               <C>
Balance, August 1, 1995                  22,843,642      $4,586       $(814,535)     $118,029,198       $32,439,271

Issuance of Common Stock in
    acquisition of subsidiaries             299,816          60                         3,018,853

Issuance of Common Stock pursuant
    to Employee Stock Compensa- 
    tion Plan                                38,170           8                           256,292

Issuance of Common Stock pursuant 
    to exercise of stock options            114,000          22                         1,215,590

Issuance, repurchase and retirement
    of Common Stock pursuant to   
    exercise of stock options and 
    related put options                                                                                    (138,597)

Net income for the nine months
    ended April 30, 1996                                                                                 14,695,681
                                      ------------------------------------------------------------------------------

Balance, April 30, 1996                  23,295,628      $4,676       $(814,535)     $122,519,933       $46,996,353
                                      ==============  ==========    =============  ===============  ================



Balance, August 1, 1996                  23,303,586      $4,669       $(814,535)     $122,757,377       $52,727,604

Issuance of Common Stock in
    acquisitions of subsidiaries            422,801          84                         4,291,122

Issuance of Common Stock pursuant 
    to exercise of stock options             50,000          10                           182,280

Issuance of Common Stock pursuant 
    to Employee Stock
    Compensation  Plan                       13,012           3                           172,223

Net income for the nine months ended
    April 30, 1997                                                                                       21,893,200
                                       -------------  ----------    -------------  ---------------  ----------------

Balance, April 30, 1997                  23,789,399      $4,766       $(814,535)     $127,403,001       $74,620,804
                                      ==============  ==========    =============  ===============  ================

</TABLE>

       See notes to condensed consolidated interim financial statements.

                                       3
<PAGE>
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
Condensed Consolidated Interim Statements of Cash Flows

<TABLE>
<CAPTION>

                                                                                     Nine Months Ended
                                                                              April 30               April 30
                                                                                1997                   1996
                                                                         -------------------------------------------
                                                                                        (Unaudited)
<S>                                                                           <C>                    <C>
Net Cash Provided by Operating Activities                                      $35,012,760+            $17,925,633

Investing Activities
        Purchases of property and equipment                                    (36,608,838)            (20,869,030)
        Changes in advances and deposits                                          (250,719)              (1,820,791)
        Payments for acquisition of net assets, net of cash acquired          (106,584,855)            (105,532,796)
                                                                         --------------------   --------------------
                                Net Cash Used in Investing Activities         (142,844,412)            (128,222,617)

Financing Activities
        Net proceeds from long-term debt and notes payable                     109,958,892              114,704,024
        Proceeds from issuance of Common Stock                                     172,227                  925,094
        Repurchase of Common Stock                                                                         (418,351)
                                                                         --------------------   --------------------
                Net Cash Provided by Financing Activities                      110,131,119              115,210,767

                Increase in Cash                                                 2,299,467                4,913,783
                Cash at Beginning of Period                                      6,438,760                  577,283
                                                                         --------------------   --------------------
                Cash at End of Period                                           $8,738,227             $  5,491,066
                                                                         ====================   ====================

</TABLE>
       See notes to condensed consolidated interim financial statements.

                                       4
<PAGE>
 
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited)

Note A - Basis of Reporting

The condensed consolidated interim balance sheet as of April 30, 1997 and the
condensed consolidated interim statements of income, shareholders' equity and
cash flows for the nine months ended April 30, 1997 and 1996 are unaudited. In
the opinion of management, these statements have been prepared on the same basis
as the audited consolidated financial statements and include all adjustments,
consisting only of normal recurring accruals, necessary for the fair statement
of the results of the interim periods.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These condensed consolidated financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's consolidated audited financial statements as
of and for the year ended July 31, 1996. The results of operations for the
interim period are not necessarily indicative of the results which may be
expected for an entire year.

Note B - Property and Equipment

Property and equipment is depreciated over three to seven years. Rental
equipment is depreciated over five years.

Note C  - Intangible Assets

Intangible assets consists of the following as of April 30, 1997:
<TABLE>
         <S>                                                                              <C>
         Excess of cost over fair value of net assets acquired and liabilities assumed    $249,781,185
         Non-compete agreements                                                             30,103,435
         Other intangibles                                                                   1,948,894
                                                                                          ------------ 
                                                                                           281,833,514
         Less accumulated amortization                                                      29,400,049
                                                                                          ------------ 
                                                                                          $252,433,465
                                                                                          ============
</TABLE>

Intangible assets are amortized over five to twenty-five years on a straight-
line basis. The excess of cost over fair value of net assets acquired and
liabilities assumed includes, but is not limited to, patient and referral lists,
business names and goodwill related to purchase transactions completed by the
Company.

Note D - Notes Payable to Banks

On June 3, 1997, the Company expanded its $200,000,000 syndicated bank credit
facility to $300,000,000, of which approximately $129,000,000 was available on
that date. The credit facility carries a negative pledge on all Company assets
and requires compliance by the Company with certain financial and negative
convenants, including a restriction on cash dividends. The syndicated bank line
of credit is payable on demand and provides for an interest rate to be selected
by the Company based on either the prime rate or LIBOR plus 0.80%, which
approximated 6.5% on June 3, 1997.

Note E - Shareholders' Equity

On May 21, 1996, the Company distributed a 100% common stock dividend to
shareholders of record as of April 30, 1996 to effect a 2-for-1 stock split.
Shareholders' equity has been restated to give retroactive recognition to the
stock split for all periods presented by reclassifying from additional paid in
capital to common stock the par value of the additional shares arising from the
split. In addition, for all periods presented, all references in the
consolidated financial statements and footnotes thereto to number of shares, per
share amounts, weighted average shares outstanding, as well as stock option and
related price information have been restated to give retroactive effect to the
split.

During the nine months ended April 30, 1997, the Company issued 422,801 shares
of its Common Stock as partial consideration for the purchase of several home
health care companies. The Company holds 1,975,266 shares in escrow related to
acquisitions as contingent shares to be released upon the development of future
events, with such measurement dates from May 1,1997 to March 29, 2000. 

                                       5


<PAGE>
 
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited)

During the nine months ended April 30, 1997, options were granted to certain
employees for the purchase of 410,000 shares of Common Stock at prices ranging
from $13.875 to $18.00 per share subject to the terms stated in the Company's
Stock Option Plans.

Note F - Subsequent Events

During the period from May 1, 1997 through June12, 1997, the Company completed
the acquisitions of the net assets or stock of 16 companies in 12 states, using
a combination of $22,273,960 cash and 19,048 shares of its Common Stock.

Note G - Pro Forma Condensed Combined Statements of Income

The pro forma condensed combined statement of income for the year ended July 31,
1996 has been prepared to illustrate the estimated combined effects of the
various Agreements of Purchase and Sale (Agreements) upon RoTech Medical
Corporation (the Company) for those acquisition transactions consummated between
August 1, 1996 and June 1, 1997. The pro forma condensed combined statement of
income was derived by adjusting the historical statement of income for the year
ended July 31, 1996 of the Company and the unaudited historical statements of
income for the most recent fiscal year end of the unaudited acquired entities.

The pro forma condensed combined interim statement of income for the nine months
ended April 30, 1997 was derived by adjusting the unaudited interim historical
statement of income for the nine months ended April 30, 1997 of the Company and
the unaudited interim historical statements of income of the acquired entities
for the period prior to their respective inclusion in the unaudited interim
historical statement of income of the Company for the nine months ended April
30, 1997. The entities acquired prior to April 30, 1997 are included in the
Company's balance sheet as of April 30, 1997.

The operations of any entities acquired subsequent to April 30, 1997 are not
included in the Company's historical interim statement of income as presented
herein. The net assets of any entities acquired subsequent to April 30, 1997 are
not included in the Company's balance sheet as of April 30, 1997.

The pro forma condensed combined statements of income were prepared as if the
purchases and sales had occurred on the first day of the respective periods
presented. The pro forma condensed combined statements of income presented are
not necessarily indicative of the results of operations that might have occurred
had such transactions been completed as of the date specified or of the results
of operations of the Company and its subsidiaries for any future period.

No changes in operating revenue and expenses have been made to reflect the
results of any modification to operations that might have been made had the
Agreements been consummated on the aforesaid assumed effective date for purposes
of presenting pro forma results. The proforma condensed combined statements of
income include amortization of goodwill as if the Agreements had been completed
on the assumed effective date referred to above.

The pro forma condensed combined statements of income should be read in
conjunction with the audited consolidated financial statements and related notes
thereto.

(a)      Amortization on intangibles recorded in the combined acquisitions
         (amortized over lives from 5 to 25 years).

(b)      Additional interest expense related to borrowings for cash paid to
         acquire combined entities; assumed borrowed on the first day of the
         respective periods presented.

(c)      Adjustment to income tax expense for the tax expense relating to the
         net income as adjusted for the combined acquired entities. Income taxes
         are calculated on the basis that operations of the consolidated company
         could be combined as one company for federal income tax purposes at the
         actual historical rate for the period.

(d)      Additional shares of the Company's Common Stock issued pursuant to the
         Agreements; assumed issued on the first day of the respective periods
         presented.

                                       6
<PAGE>

ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
Notes to Consolidated Interim Financial Statements
(Unaudited)

Note G - Pro Forma Condensed Combined Statements of Income - Continued
Pro Forma Condensed Combined Statement of Income
<TABLE>
<CAPTION>

                                                                  For the Year Ended July 31, 1996
                                             ----------------------------------------------------------------------------
                                                                             (Unaudited)
                                                                                                        RoTech Medical
                                                                                                          Corporation
                                               RoTech Medical       Combined                               Combined
                                                Corporation         Acquired         Pro Forma             Pro Forma
                                                Consolidated        Entities        Adjustments             Results
                                             -------------------  -------------  ------------------     ----------------
<S>                                          <C>                  <C>            <C>                    <C>
Operating revenue                                 $263,029,963      $94,378,773                            $357,408,736
Cost and expenses:
     Cost of revenue                                71,012,877       30,703,746                             101,716,623
     Selling, general and administrative           127,357,013       44,160,009                             171,517,022
     Depreciation and amortization                  26,519,480        3,269,053      $5,072,981   (a)        34,861,514
     Interest                                        5,228,318          948,784       7,603,779   (b)        13,780,881
                                                  -------------  ---------------  ----------------      ----------------
                                                   230,117,688       79,081,592      12,676,760             321,876,040
                                                  -------------  ---------------  ----------------      ----------------

Income before income taxes                          32,912,275       15,297,181     (12,676,761)             35,532,695
Income tax expense                                  12,356,500          162,128         806,133   (c)        13,324,761
                                                  -------------  ---------------  ----------------      ----------------
          Net income                              $ 20,555,775      $15,135,053    $(13,482,893)           $ 22,207,935
                                                  =============  ===============  ================      ================


Net income per share:
     Primary                                             $0.83                                                    $0.88
     Fully diluted                                       $0.82                                                    $0.86
Weighted average number of shares outstanding:
     Primary                                        24,657,000                          496,387 (d)          25,153,387
     Fully diluted                                  25,206,000                          496,387 (d)          25,702,387
</TABLE>

                                       7
<PAGE>


ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
Notes to Consolidated Interim Financial Statements
(Unaudited)

Note G - Pro Forma Condensed Combined Statements of Income - Continued
Pro Forma Condensed Combined Interim Statement of Income
<TABLE>
<CAPTION>

                                                              For the Nine Months Ended April 30, 1997
                                             ----------------------------------------------------------------------------
                                                                             (Unaudited)
                                                                                                        RoTech Medical
                                                                                                          Corporation
                                               RoTech Medical       Combined                               Combined
                                                Corporation         Acquired         Pro Forma             Pro Forma
                                                Consolidated        Entities        Adjustments             Results
                                             -------------------  -------------  ------------------     ----------------
<S>                                          <C>                  <C>            <C>                    <C>
Operating revenue                                 $297,574,404      $38,368,018                            $334,942,422
Cost and expenses:
     Cost of revenue                                77,090,828       12,505,009                              89,595,837
     Selling, general and administrative           145,710,671       17,019,182                             162,729,853
     Depreciation and amortization                  30,343,973        1,322,074      $1,937,284   (a)        33,603,331
     Interest                                        9,214,066          329,353       3,062,152   (b)        12,605,571
                                                  -------------  ---------------  ----------------      ----------------
                                                   262,359,538       31,175,618       4,999,436             298,534,592
                                                  -------------  ---------------  ----------------      ----------------

Income before income taxes                          35,214,866        7,192,400      (4,999,436)             37,407,830
Income tax expense                                  13,321,666           59,134         647,136   (c)        14,027,936
                                                  -------------  ---------------  ----------------      ----------------
          Net income                               $21,893,200       $7,133,266     $(5,646,572)            $23,379,894
                                                  =============  ===============  ================      ================

Net income per share:
     Primary                                             $0.84                                                    $0.88
     Fully diluted                                       $0.81                                                    $0.84
Weighted average number of shares outstanding:
     Primary                                        26,186,355                          496,387   (d)        26,682,742
     Fully diluted                                  30,728,710                          496,387   (d)        31,225,097

</TABLE>

                                       8
<PAGE>

ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
Management's Discussion and Analysis of Financial Condition and Results of
Operations

Results of Operations
For the Three Months Ended and Nine Months Ended April 30, 1997 and 1996

Operating revenue for the three months ended April 30, 1997 increased 50% to
$109,432,000 from $72,984,000 for the three months ended April 30, 1996.
Operating revenue increased 66% to $297,574,000 for the nine months ended April
30, 1997 from $179,566,000 for the nine months ended April 30, 1996. This
increase in operating revenue is attributable to acquisitions and expanded
product and service lines in existing areas of operation. The Company has
focused its acquisition and expansion efforts to develop the home respiratory
and other medical equipment line of business, yet employs a single sales force
to market all products and services offered by the Company.

Operating revenue for the home respiratory and other medical equipment grew to
$83,560,000 for the three months ended April 30, 1997 from $57,730,000 for the
three months ended April 30, 1996. This 45% increase was due mainly to increases
in patient bases throughout the Company's locations and increased marketing
efforts in certain locations. The majority of the Company's acquisitions made
during the nine months ended April 30, 1997 are primarily in this line of
business.
 
Operating revenue from home infusion therapy and other pharmacy-related products
and services increased 72% to $16,946,000 for the three months ended April 30,
1997 from $9,850,000 for the three months ended April 30, 1996. Growth in this
line of business should continue as the Company expands its referral bases and
available products and services.
 
Operating revenue from primary care physician services and other services
increased to $8,925,000 for the three months ended April 30, 1997 from
$5,404,000 for the three months ended April 30, 1996. Growth in this line of
business over the prior year is due to the Company's increased market
penetration, seasonal volume and managed care initiatives begun in the two
regional markets where it operates.

The pro forma condensed combined statements of income presented in Note G to the
interim financial statements depict the effect of the acquired entities on the
prior fiscal year's and current fiscal year's operations to date. Such financial
statements include the additional costs of the acquisitions, but do not include
the savings that the Company has planned in the process of the combination and
integration of operations into the existing Company.
 
Cost of revenue as a percentage of operating revenue was 24.2% for the three
months and 25.9% for the nine months ended April 30, 1997 compared to 27.8% for
the three months and 27.5% for the nine months ended April 30, 1996. The
addition of new entities coupled with changes in the product mix at existing
locations causes this relationship to change from quarter to quarter.
Consolidation of purchasing functions and purchasing power is an on-going task
as the Company continues to acquire businesses with varied needs, strengths and
product mixes. Selling, general and administrative expenses as a percentage of
operating revenue increased to 50.3% for the three months and 49.0% for the nine
months ended April 30, 1997 from 47.8% and 48.2% for the respective periods in
the prior year. Growth in the rental revenue from home respiratory and medical
equipment reduce the percentage of cost of sales, while growth in physician
related services reduces the percentage of cost of sales and increases the
percentage of selling, general and administrative expenses in relation to total
revenues.

                                       9
<PAGE>


ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
Management's Discussion and Analysis of Financial Condition and Results of
Operations (continued)

Results of Operations
For the Three  Months  Ended and Nine  Months  Ended  April 30,  1997 and 1996 -
continued

Income before interest, taxes, depreciation and amortization for the nine months
ended April 30, 1997 grew to 72% to $74,773,000  from  $43,652,000  for the nine
months ended April 30, 1996.  This 71% growth  compared to the 49% growth in net
income primarily  demonstrates the effect of the cost of capital employed in the
expansion of the Company and of purchase accounting.  The Company has never done
a pooling of interests as a result of its acquisition activities.

Depreciation  and  amortization  expense  increased to $30,344,000  for the nine
months ended April 30, 1997 from $17,502,000 for the nine months ended April 30,
1996. This increase is attributable to the Company's  purchase of intangible and
fixed assets resulting from various acquisitions along with the additional fixed
assets needed for the increased rentals of equipment as also demonstrated in the
increase in income before interest, taxes, depreciation and amortization.

The Company  incurred net  interest  expense of  $9,214,000  for the nine months
ended April 30, 1997 compared to net interest expense of $3,098,000 for the nine
months ended April 30,  1996.  The interest  expense  resulted  from the Company
borrowing monies to fund its acquisition  program,  which included total average
borrowings of $212,000,000 borrowed between August 1, 1996 and April 30, 1997 on
its syndicated bank line of credit and convertible subordinated debentures .

Income tax expense was  provided at a 37.8%  effective  rate for the nine months
ended April 30, 1997, comparable to actual rates expected for the current fiscal
year and those experienced in prior periods.

As a result of the foregoing,  net income  increased 49% to $21,893,000  for the
nine  months  ended April 30, 1997 from  $14,696,000  for the nine months  ended
April 30, 1996.


Liquidity and Capital Resources

At April 30, 1997,  total  current  assets were  $149,479,000 and total current
liabilities  were  $186,674,000, resulting  in  negative  working  capital  of
$37,195,000. The Company's current ratio was 0.80 to 1.00 at April 30, 1997
compared to 0.74 to 1.00 at April 30, 1996. The negative working capital is
attributable to the Company carrying the entire balance of notes payable to
banks of $ 162,014,000 as a current liability at April 30, 1997.

During the nine months  ended April 30,  1997,  the  Company  generated  cash of
$35,013,000 from operating activities,  primarily as a result of net income of
$21,893,000,  depreciation  and  amortization  of $30,344,000  and the timing of
purchases of and payments for operating items. As of April 30, 1997, the Company
had borrowed $162,014,000 on its line of credit to fund its acquisition program.
The Company's  syndicated bank credit facility was expanded from $200,000,000 to
$300,000,000 on June 3, 1997, of which approximately  $129,000,000 was available
at that time.  The terms and covenants are similar to those in the previous loan
agreement.   Management  believes  the  Company's  current  credit  capacity  is
sufficient  for the  projected  growth of the  Company  during  the next  twelve
months.

At April 30,  1997,  net  accounts  receivable  were  $114,135,000  compared  to
$74,291,000  at April 30, 1996.  The Company's  days revenue  outstanding on net
accounts  receivable were 94 days at April 30, 1997 compared to 92 days at April
30,  1996.  Acquired  receivables  with no  corresponding  revenue  account  for
approximately  12 days revenue  outstanding on net accounts  receivable at April
30, 1997 and approximately 9 days at April 30, 1996.

                                       10
<PAGE>
 
ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------

Part II.  Other Information
--------  -----------------
          
          
<TABLE>   
          <S>                      <C>
          Item 1.                  Legal proceedings
                                   NOT APPLICABLE
          
          Item 2.                  Changes 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

</TABLE>

                                       11
<PAGE>

ROTECH MEDICAL CORPORATION AND SUBSIDIARIES
--------------------------------------------------------------------------------
Signature




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.

                                    ROTECH MEDICAL CORPORATION
                                    a Florida Corporation


Dated:     June 16, 1997                  By:   /s/ Rebecca R. Irish
          ----------------                   ---------------------------
                                             Rebecca R. Irish, Treasurer
                                             and Chief Financial Officer

                                       12