<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 Quarterly period ended June 30, 1996; 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: 0-27186
-------
RAYTEL MEDICAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 94-2787342
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2755 CAMPUS DRIVE, SUITE 200, SAN MATEO, CALIFORNIA 94403
(Address of principal executive offices) (Zip code)
(415) 349-0800
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS SHARES OUTSTANDING AS OF JULY 31, 1996
----- --------------------------------------
COMMON STOCK 8,291,725
($.001 PAR VALUE)
<PAGE>
RAYTEL MEDICAL CORPORATION AND SUBSIDIARIES
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
June 30, 1996 and September 30, 1995........................... 3
Condensed Consolidated Statements of Operations
for the three months and the nine months ended June 30,
1996 and 1995.................................................. 4
Condensed Consolidated Statements of Cash Flows
for the nine months ended June 30, 1996 and 1995............... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................ 6
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders............. 11
Item 6. Exhibits and Reports on Form 8-K................................ 12
SIGNATURE................................................................ 13
2
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RAYTEL MEDICAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000'S OMITTED)
ASSETS
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
1996 1995
----------- -------------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,337 $ 4,983
Receivables, net 26,126 22,415
Prepaid expenses and other 1,627 1,286
------- -------
Total current assets 31,090 28,684
Investment in and advances to
unconsolidated entities and partnerships 86 158
Property and equipment, less accumulated
depreciation and amortization 9,312 8,598
Intangible assets, less accumulated
amortization 22,969 9,328
------- -------
Total assets $63,457 $46,768
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 3,203 $ 4,275
Current portion of capital lease
obligations 652 1,047
Accounts payable 3,055 2,189
Accrued liabilities 5,904 5,626
------- -------
Total current liabilities 12,814 13,137
Long-term debt, net of current portion 2,031 7,718
Capital lease obligations, net of current
portion 614 984
Redeemable warrants - 1,600
Deferred liabilities 952 749
Minority interest in consolidated entities 1,084 1,081
------- -------
Total liabilities 17,495 25,269
------- -------
Stockholders' equity:
Preferred stock - 7
Common stock 8 2
Additional paid-in capital 55,232 31,410
Accumulated deficit (9,278) (9,920)
------- -------
Total stockholders' equity 45,962 21,499
------- -------
Total liabilities and stockholders'
equity $63,457 $46,768
------- -------
------- -------
</TABLE>
3
<PAGE>
RAYTEL MEDICAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(000'S OMITTED, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------- ----------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
Net patient and service revenues $ 18,699 $ 15,969 $ 52,142 $ 47,255
Other revenues 207 179 626 296
-------- -------- -------- --------
Total revenues 18,906 16,148 52,768 47,551
-------- -------- -------- --------
Costs and expenses:
Operating costs 7,505 4,977 19,685 15,641
Selling, general and administrative 7,290 6,488 20,932 19,855
Depreciation and amortization 1,397 1,478 4,030 4,380
Non-recurring tender offer expense - 300 - 1,050
-------- -------- -------- --------
Total costs and expenses 16,192 13,243 44,647 40,926
-------- -------- -------- --------
Operating income 2,714 2,905 8,121 6,625
Interest expense 84 504 518 1,597
Other expense (income) (166) (57) (463) (267)
Minority interest 224 355 647 832
-------- -------- -------- --------
Income before income taxes and
extraordinary item 2,572 2,103 7,419 4,463
Provision for income taxes 659 652 2,597 1,383
-------- -------- -------- --------
Income before extraordinary item 1,913 1,451 4,822 3,080
Extraordinary item, net of related
tax benefit - - 402 -
-------- -------- -------- --------
Net income $ 1,913 $ 1,451 $ 4,420 $ 3,080
-------- -------- -------- --------
-------- -------- -------- --------
Net income per share before
extraordinary item $ .22 $ .26 $ .60 $ .55
-------- -------- -------- --------
-------- -------- -------- --------
Net income per share $ .22 $ .26 $ .55 $ .55
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average common shares and
dilutive equivalents outstanding 8,828 5,626 7,972 5,607
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
4
<PAGE>
RAYTEL MEDICAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(000'S OMITTED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
----------------------
JUNE 30, JUNE 30,
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,420 $ 3,080
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 4,030 4,380
Minority interest 647 832
Equity (earnings) loss of unconsolidated entities (221) 272
Extraordinary item, net 402 -
Other, net 164 379
Changes in operating accounts:
Receivables, net (3,701) (5,386)
Prepaid expenses and other (260) (489)
Accounts payable 845 (482)
Accrued liabilities and other (37) 1,419
--------- ---------
Net cash provided by operating activities 6,289 4,005
--------- ---------
Cash flows from investing activities:
Capital expenditures (2,446) (1,499)
Increase in intangible assets (37) (155)
Cash received from unconsolidated entities 348 11
Payment for purchase of certain net assets (14,254) -
Other, net (57) (6)
--------- ---------
Net cash used in investing activities (16,446) (1,649)
--------- ---------
Cash flows from financing activities:
Net proceeds from initial public offering 20,400 -
Repurchase of warrants (2,101) -
Proceeds from exercise of stock options 146 1
Repurchase of Company stock - (25)
Income distributions to noncontrolling investors (638) (868)
Proceeds from line of credit 2,907 -
Principal repayments of debt (12,203) (3,504)
--------- ---------
Net cash provided by (used in) financing
activities 8,511 (4,396)
--------- ---------
Net decrease in cash and cash equivalents (1,646) (2,040)
Cash and cash equivalents at beginning of period 4,983 5,847
--------- ---------
Cash and cash equivalents at end of period $ 3,337 $ 3,807
--------- ---------
--------- ---------
</TABLE>
The interim financial statements furnished above reflect all adjustments
which are, in the opinion of management, necessary to a fair statement of the
results for the interim periods presented. These interim financial statements
should be read in conjunction with the financial statements and notes included
in the Company's Form S-1 Registration Statement filed on October 6, 1995, as
amended, and included in the Company's final Prospectus dated November 30, 1995
related thereto.
The foregoing interim results are not necessarily indicative of the results
of operations for the full fiscal year ending September 30, 1996.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This discussion and analysis includes a number of forward-looking statements
which reflect the Company's current views with respect to future events and
financial performance. These forward-looking statements are subject to certain
risks and uncertainties, including those discussed under "Business Environment
and Future Results" and elsewhere in this Item, that could cause actual results
to differ materially from historical results or those anticipated. In this
Item, the words "anticipates," "believes," "expects," "intends," "future" and
similar expressions identify forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date hereof.
OVERVIEW
The Company generates substantially all of its revenues from the provision of
transtelephonic monitoring ("TTM") services for cardiac pacemaker patients,
cardiac event detection services ("CEDS"), diagnostic imaging services and
cardiac catheterization procedures. Beginning on February 1, 1996, revenue is
also being provided from the operation of the Raytel Heart Center at Granada
Hills (the "RHCGH"), as described below.
Effective June 11, 1996, the Company acquired certain assets and assumed
certain liabilities of Cardio Data Services, Inc., a wholly-owned subsidiary of
UM Equity Corp. The Company has continued to operate the acquired business
under the name "Cardio Data Services" ("CDS"). CDS is engaged in the business
of clinical trans-telephonic pacemaker monitoring, cardiac event detection and
Holter monitoring. The purchase price of the transaction was $14,254,000 and of
such amount, $13,985,000 was allocated to the acquisition of intangible assets,
the majority of which will be amortized over 25 years.
On March 1, 1996, an existing imaging center in Turnersville, New Jersey
began operations under Raytel management. This multi-modality facility provides
mammography, ultrasound, diagnostic X-ray and fluoroscopy procedures. The
Company expects to expand the modalities offered at the facility to include
computed tomography ("CT") and magnetic resonance imaging ("MRI") in the near
future.
In January 1996, the Company signed two agreements for the development of
heart centers. Under an agreement with Stanford Health Services, the Company
will provide interventional cardiac services at a cardiac catheterization center
to be developed and managed by the Company. The Company will provide the
facilities and equipment for the center and will be responsible for the day-to-
day operations of the facility, including administrative support facilities
management. The Company will also be primarily responsible for marketing and
public relations activities for the center. This facility is currently under
construction. The second agreement, with Granada Hills Community Hospital,
became effective February 1, 1996 and provides for the creation of the Company's
first integrated heart center, RHCGH. The Company is responsible for the day-
to-day operations of RHCGH, including administrative support and other non-
medical aspects of the program. The Company is also primarily responsible for
all marketing and public relations activities, as well as assisting the hospital
in the negotiation and administration of contracts with managed care
organizations and other third-party payors.
In December 1995, the Company completed the initial public offering of its
Common Stock which yielded net proceeds, after underwriting discounts and
expenses, of $20,400,000. The Company used approximately $6,000,000 of the
proceeds of the offering to pay the remaining balance of a term loan from two
banks, approximately $2,101,000 to repurchase certain outstanding redeemable
warrants and $5,000,000 to repay substantially all of a subordinated note of the
Company. The remaining proceeds were used for working capital, general
corporate purposes and a portion of the purchase price for CDS.
For the nine months ended June 30, 1996, the Company's operating results
were slightly adversely effected by weather conditions on the East Coast.
6
<PAGE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THREE MONTHS ENDED JUNE 30,
1995.
The operations of RHCGH are included in the Company's Consolidated Statements
of Operations since February 1, 1996, the effective date of the Company's
agreement with Granada Hills Community Hospital. Accordingly, RHCGH's
operations are included for the three month period ended June 30, 1996, but are
not included in the three month period ended June 30, 1995. The operations of
CDS are included in the Company's Consolidated Statements of Operations since
June 11, 1996, the effective date of the Company's acquisition. Accordingly,
the operations of CDS are included for 20 days of the three month period ended
June 30, 1996, but are not included in the three month period ended June 30,
1995.
REVENUES. Total revenues increased by $2,758,000, or 17.1%, from
$16,148,000 for the three months ended June 30, 1995 to $18,906,000 for the
three months ended June 30, 1996, due primarily to the inclusion of the revenues
from RHCGH and, to a much lesser extent, from CDS. Revenues from TTM services,
diagnostic imaging services, and the catheterization laboratories all remained
relatively unchanged.
OPERATING EXPENSES. Operating costs and selling, general and administrative
expenses increased by $3,330,000 or 29.0%, from $11,465,000 for the three months
ended June 30, 1995 to $14,795,000 for the three months ended June 30, 1996 due
primarily to the inclusion of expenses related to RHCGH and to a much lesser
extent, CDS. Operating costs and selling, general and administrative expenses
as a percentage of total revenues increased by 7.3% from 71.0% for the three
months ended June 30, 1995 to 78.3% for the three months ended June 30, 1996 due
primarily to the inclusion of revenues and expenses related to RHCGH, where
operating expenses were slightly in excess of revenues.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
decreased by $81,000, from $1,478,000 for the three months ended June 30,
1995 to $1,397,000 for the three months ended June 30, 1996, and declined as
a percentage of revenues from 9.2% for the three months ended June 30, 1995
to 7.4% for the three months ended June 30, 1996.
NON-RECURRING TENDER OFFER EXPENSE. During the three months ended June 30,
1995, the Company charged off costs of $300,000 relating to an unsuccessful
tender offer for a public company.
OPERATING INCOME. As a result of the foregoing factors, operating income
decreased by $191,000, or 6.6% from $2,905,000 for the three months ended June
30, 1995 to $2,714,000 for the three months ended June 30, 1996.
INTEREST EXPENSE. Interest expense decreased by $420,000, or 83.3%, from
$504,000 for the three months ended June 30, 1995 to $84,000 for the three
months ended June 30, 1996 primarily due to the repayment of term debt in the
first quarter of fiscal 1996 and a reduction in the principal amount outstanding
under equipment loans and capital leases.
INCOME TAXES. The provision for income taxes increased by $7,000, or 1.1%,
from $652,000 for the three months ended June 30, 1995 to $659,000 for the three
months ended June 30, 1996 as a result of increased taxable income offset by a
lower effective tax rate in the current period.
NET INCOME. As a result of the foregoing factors, net income increased
by $462,000, or 31.8%, from $1,451,000 for the three months ended June 30, 1995
to $1,913,000 for the three months ended June 30, 1996.
NINE MONTHS ENDED JUNE 30, 1996 COMPARED TO NINE MONTHS ENDED JUNE 30, 1995.
The operations of RHCGH are included in the Company's Consolidated
Statements of Operations since February 1, 1996, the effective date of the
Company's agreement with Granada Hills Community Hospital. Accordingly, the
RHCGH's operations are included for five months of the nine month period
ended June 30, 1996,
7
<PAGE>
but are not included in the nine month period ended June 30, 1995. The
operations of CDS are included in the Company's Consolidated Statements of
Operations since June 11, 1996, the effective date of the Company's
acquisition. Accordingly, the operations of CDS are included for 20 days of
the nine month period ended June 30, 1996, but are not included in the nine
month period ended June 30, 1995.
REVENUES. Total revenues increased by $5,217,000, or 11.0%, from
$47,551,000 for the nine months ended June 30, 1995 to $52,768,000 for the nine
months ended June 30, 1996, due primarily to the inclusion of the revenues from
RHCGH and, to a much lesser extent, from CDS. Revenues from TTM services,
diagnostic imaging services, and the catheterization laboratories all remained
relatively unchanged.
OPERATING EXPENSES. Operating costs and selling, general and administrative
expenses increased by $5,121,000, or 14.4%, from $35,496,000 for the nine months
ended June 30, 1995 to $40,617,000 for the nine months ended June 30, 1996, due
primarily to the inclusion of expenses related to RHCGH. Operating costs and
selling, general and administrative expenses as a percentage of total revenues
increased slightly due primarily to the inclusion of revenues and expenses
related to RHCGH, where operating expenses were slightly in excess of revenues.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
decreased by $350,000, from $4,380,000 for the nine months ended June 30, 1995
to $4,030,000 for the nine months ended June 30, 1996, and declined as a
percentage of revenues from 9.2% for the nine months ended June 30, 1995 to 7.6%
for the nine months ended June 30, 1996.
NON-RECURRING TENDER OFFER EXPENSE. During the nine months ended June 30,
1995, the Company charged off costs of $1,050,000 relating to an unsuccessful
tender offer for a public company.
OPERATING INCOME. As a result of the foregoing factors, operating income
increased by $1,496,000 or 22.6% from $6,625,000 for the nine months ended June
30, 1995 to $8,121,000 for the nine months ended June 30, 1996.
INTEREST EXPENSE. Interest expense decreased by $1,079,000, or 67.6%,
from $1,597,000 for the nine months ended June 30, 1995 to $518,000 for the nine
months ended June 30, 1996 primarily due to the final repayment of term debt in
the first quarter of fiscal 1996 and a reduction in the principal amount
outstanding under equipment loans and capital leases.
INCOME TAXES. The provision for income taxes increased by $1,214,000, or
87.8%, from $1,383,000 for the nine months ended June 30, 1995 to $2,597,000 for
the nine months ended June 30, 1996 as a result of increased taxable income and
a higher effective tax rate in the current period.
EXTRAORDINARY ITEM. An extraordinary noncash charge of $402,000, net of the
related tax benefit, for the write-off of unamortized debt discount and the
write-off of capitalized debt issuance expense was charged off in the nine
months ended June 30, 1996. This charge resulted from the repayment of
indebtedness and the repurchase of certain redeemable warrants from the net
proceeds of the initial public offering.
NET INCOME. As a result of the foregoing factors, net income increased
by $1,340,000, or 43.5%, from $3,080,000 for the nine months ended June 30, 1995
to $4,420,000 for the nine months ended June 30, 1996. Excluding the
extraordinary item, net income would have increased by $1,742,000, or 56.6%, to
$4,822,000 for the nine months ended June 30, 1996.
BUSINESS ENVIRONMENT AND FUTURE RESULTS
The Company's future operating results may be affected by various trends in
the healthcare industry as well as by a variety of other factors, some of which
are beyond the Company's control.
8
<PAGE>
The healthcare industry is undergoing significant change as third-party
payors attempt to control the cost, utilization and delivery of healthcare
services. Substantially all of the Company's revenues are derived from
Medicare, HMOs, and commercial insurers and other third-party payors. Both
government and private payment sources have instituted cost containment measures
designed to limit payments made to healthcare providers, by reducing
reimbursement rates, limiting services covered, increasing utilization review of
services, negotiating prospective or discounted contract pricing, adopting
capitation strategies and seeking competitive bids. Although the Company's
total revenues have increased in each of the last three fiscal years, revenue
growth of the Company's TTM operations during that period has been negatively
impacted by Medicare reimbursement rate reductions in certain geographic areas.
Additional reimbursement rate reductions applicable to the Company's TTM
procedures became effective on January 1, 1996. These reductions had a negative
effect on the Company's operating results for the first nine months of fiscal
1996 and, unless modified, will continue to have some negative effect on its
ongoing operating results. The Company cannot predict with any certainty
whether or when additional reductions or changes in Medicare or other third-
party reimbursement rates or policies will be implemented. There can be no
assurance that future changes, if any, will not adversely affect the amounts or
types of services that may be reimbursed to the Company, or that future
reimbursement of any service offered by the Company will be sufficient to cover
the costs and overhead allocated to such service.
In 1995, Congress passed legislation to reduce Medicare and Medicaid
expenditures. This legislation was vetoed by the President; however, future
legislation of this type could have a material adverse effect on the Company's
business, financial condition and operating results.
A key element of the Company's long-range strategy is the development and
operation of integrated heart centers. The Company has entered into two
agreements for the development of heart centers. One of these projects is now
operating, but the other project is in the early stage of development and there
can be no assurance that the Company will be able to complete this or other
similar projects. The success of the Company's proposed heart centers will
depend upon several factors, including the Company's ability to: obtain, and
operate in compliance with, appropriate licenses; control costs and realize
operating efficiencies; educate patients, referring physicians and third-party
payors about the benefits of such heart centers; and provide cost-effective
services that meet or exceed existing standards of care.
Providers of healthcare services are subject to numerous federal, state and
local laws and regulations that govern various aspects of their business. There
can be no assurance that the Company will be able to obtain regulatory approvals
that may be required to expand its services or that new laws or regulations will
not be enacted or adopted that will have a material adverse effect on the
Company's business, financial condition or operating results.
The healthcare businesses in which the Company is engaged are highly
competitive. The Company expects competition to increase as a result of ongoing
consolidations and cost-containment pressures, among other factors.
The trading price of the Company's Common Stock could be subject to wide
fluctuations in response to quarterly variations in the Company's operating
results, shortfalls in such operating results from levels forecasted by
securities analysts and other events or factors. In addition, the stock market
has, from time to time, experienced extreme price and volume fluctuations that
have particularly affected the market prices of companies in the healthcare
service industries and that have often been unrelated to the operating
performance of the affected companies. Announcements of changes in
reimbursement policies of third-party payors, regulatory developments, economic
news and other external factors may have a significant impact on the market
price of healthcare stocks.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity was materially improved as a result of the completion
of the initial public offering of its Common Stock in December 1996 and its
receipt of $20,400,000 in net proceeds therefrom. The Company acquired CDS in
June 1996 for cash in the amount of $14,254,000. At June 30, 1996, the Company
had working capital of $18,276,000, compared to $15,547,000 at September 30,
1995. At June 30, 1996, the Company had cash and temporary cash investments of
$3,337,000. At June 30, 1996 the amount available under the existing
9
<PAGE>
$10,000,000 line of credit totaled $5,160,000 and there was $2,907,000
outstanding, which amount was repaid during July 1996.
The Company batch-bills Medicare insurance carriers for most TTM services
performed during the first five months of each calendar year. This practice
results in a temporary build-up of accounts receivable during the Company's
second and third fiscal quarters and the collection of these receivables
primarily during the subsequent fourth fiscal quarter and the first quarter of
the following fiscal year.
The Company has received a commitment from the Bank of Boston Connecticut to
provide a revolving line of credit in the amount of $25,000,000 to fund working
capital needs, future acquisitions of facilities, equipment and businesses.
This line of credit will bear interest based on a defined formula and will be
subject to certain covenants. This credit facility is subject to the completion
and execution of definitive documentation.
The Company's long-term capital requirements will depend on numerous factors,
including the rate at which the Company develops and opens heart centers or
acquires existing heart centers or other businesses, if any. The Company
believes the proceeds of the initial public offering, together with amounts
available from bank borrowings and cash generated by its operating activities,
will be adequate to meet the Company's anticipated needs for working capital and
capital expenditures through at least the next 12 months.
10
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
a. The Company's annual meeting of shareholders was held on May 8,
1996.
b. The following persons nominated by management were elected to
serve as directors:
Shares
------------------------
Name For Withheld
---- --- --------
David Rollo, M.D. 6,511,313 18,486
Thomas J. Fogarty, M.D. 6,512,113 17,686
The following directors remained in office; Richard F. Bader,
Allan Zinberg, Gene I. Miller, Timothy J. Wollaeger, and Albert
Henry.
c. The following additional matters voted upon at the meeting and the
results of the voting were as follows:
1. A proposal to approve an amendment to the Company's 1990 Stock
Option Plan to increase the number of shares reserved for
issuance thereunder by 600,000 shares.
Shares
-----------------------------------------------------------
For Against Abstain Broker Non-Vote
--- ------- ------- ---------------
4,998,762 1,029,141 37,193 464,703
2. A proposal to approve the adoption of the Company's 1996
Employee Stock Purchase Plan.
Shares
-----------------------------------------------------------
For Against Abstain Broker Non-Vote
--- ------- ------- ---------------
5,879,891 151,182 28,552 470,174
3. To ratify the appointment of Arthur Andersen LLP as the
independent accountants of the Company for the fiscal year
ending September 30, 1996.
Shares
----------------------------------------
For Against Abstain
--- ------- -------
6,456,590 59,016 14,193
11
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS:
The following exhibits are filed as a part of this Report:
Exhibit
Number Title
------- -----
27 Financial data schedule
B. REPORTS ON FORM 8-K:
The Company filed one report on Form 8-K during the quarter ended
June 30, 1996. The report was filed on June 25, 1996 and it reported
under Item 2 the acquisition of certain assets and assumed certain
liabilities of CDS effective June 11, 1996.
12
<PAGE>
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.
RAYTEL MEDICAL CORPORATION
Dated: August 12, 1996 By: /s/ E. Payson Smith, Jr.
--------------------------
E. Payson Smith, Jr.
Senior Vice President, Chief
Financial Officer and Secretary
(duly authorized officer and
principal financial officer)
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM RAYTEL
MEDICAL CORPORATION AND SUBSIDIARIES FINANCIAL STATEMENTS AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 3,337
<SECURITIES> 0
<RECEIVABLES> 26,126<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 31,090
<PP&E> 23,074
<DEPRECIATION> (13,762)
<TOTAL-ASSETS> 63,457
<CURRENT-LIABILITIES> 12,814
<BONDS> 0
0
0
<COMMON> 8
<OTHER-SE> 45,954
<TOTAL-LIABILITY-AND-EQUITY> 63,457
<SALES> 0
<TOTAL-REVENUES> 52,768
<CGS> 0
<TOTAL-COSTS> 44,647
<OTHER-EXPENSES> 184
<LOSS-PROVISION> 0<F2>
<INTEREST-EXPENSE> 518
<INCOME-PRETAX> 7,419
<INCOME-TAX> 2,597
<INCOME-CONTINUING> 4,822
<DISCONTINUED> 0
<EXTRAORDINARY> 402
<CHANGES> 0
<NET-INCOME> 4,420
<EPS-PRIMARY> .55
<EPS-DILUTED> .55
<FN>
<F1>REPRESENTS NET RECEIVABLES.
<F2>INCLUDED ON LINE 29.
</FN>
</TABLE>
