<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): November 12, 1998
IMPATH INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-27750 13-3459685
-------------------------- ---------- -----------------
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
521 West 57th Street
New York, New York 10019
- ---------------------------------------- --------
(Address of Principal Executive Offices) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 698-0300
(Not applicable)
-----------------------------------------------------------
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS.
On August 31, 1998 the Registrant announced it had acquired Medical
Registry Services, Inc. ("MRS"), a leading developer and marketer of cancer
registry software products that are currently utilized in over 400 hospitals
throughout the United States. The products are used to collect and manage
critical diagnostic, treatment, follow-up and outcomes data on cancer patients.
MRS shareholders received 550,000 shares of the Registrant's common stock in
exchange for all of the outstanding shares of MRS. The acquisition was
accounted for as a pooling-of-interests. On October 26, 1998 the Registrant
released its earnings for the third quarter ended September 30, 1998, which
included results of at least 30 days of combined operations of the Registrant
and MRS. The Registrant has filed herewith under Item 7 unaudited pro forma
combined consolidated statements of operations with pooling restatements for the
years ended December 31, 1995, 1996 and 1997 and for the nine months ended
September 30, 1997 and 1998.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(b) Pro Forma Financial Information:
-------------------------------
The Registrant's unaudited pro forma combined consolidated
statements of operations with pooling restatements for the years ended December
31, 1995, 1996 and 1997 and for the nine months ended September 30, 1997 and
1998 contained in this Current Report on Form 8-K are attached hereto.
(c) Exhibit Index:
-------------
99.1 Press Release of the Registrant dated August 31, 1998.................
99.2 Press Release of the Registrant dated October 26, 1998................
<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 hereunto duly authorized.
IMPATH INC.
Date: November 12, 1998 By /s/ John P. Gandolfo
----------------------------
Name: John P. Gandolfo
Title: Executive Vice President, Chief
Operating Officer and
Chief Financial Officer
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IMPATH INC.
PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS WITH POOLING
RE-STATEMENTS
UNAUDITED
<TABLE>
<CAPTION>
YR END YR END 9 MO.END YR END 9 MO.END
COMBINED COMBINED COMBINED COMBINED COMBINED
12/31/95 12/31/96 9/30/97 12/31/97 9/30/98
--------- --------- --------- -------- --------
Revenues:
<S> <C> <C> <C> <C> <C>
Net diagnostic and prognostic services 14,578,326 21,755,193 26,348,490 36,821,738 38,775,428
Biopharmaceutical services 135,238 210,270 110,363 241,743 615,833
Tumor registry services 2,894,737 3,169,219 2,493,293 3,449,795 2,818,899
---------- ---------- ---------- ---------- ----------
Total Revenues 17,608,301 25,134,682 28,952,146 40,513,276 42,210,160
---------- ---------- ---------- ---------- ----------
Operating expenses:
Salaries and related costs 8,550,719 11,331,922 12,471,324 17,341,924 16,928,271
Selling, general, and administrative 7,916,405 11,079,781 12,857,813 17,374,379 18,667,848
One time charges relating to pooling - - - 750,000
---------- ---------- ---------- ---------- ----------
Total operating expenses 16,467,124 22,411,703 25,329,137 34,716,303 36,346,119
---------- ---------- ---------- ---------- ----------
Income from operations 1,141,177 2,722,979 3,623,009 5,796,973 5,864,041
Other income, net 28,361 1,043,250 581,703 736,789 2,057,145
---------- ---------- ---------- ---------- ----------
Income before tax expense 1,169,538 3,766,229 4,204,712 6,533,762 7,921,186
Income tax expense (6,558) (1,630,744) (1,858,574) (2,862,392) (2,677,366)
---------- ---------- ---------- ---------- ----------
Net income 1,162,980 2,135,485 2,346,138 3,671,370 5,243,820
Accrued dividends on preferred stock (478,000) (82,346) - - -
---------- ---------- ---------- ---------- ----------
Net income available to common stockholders 684,980 2,053,139 2,346,138 3,671,370 5,243,820
========== ========== ========== ========== ==========
Per common and common equivalent share:
Basic
Net income per common share 0.34 0.41 0.37 0.62 0.67
========== ========== ========== ========== ==========
Weighted average common and common equivalent
shares outstanding 3,471,000 5,241,000 6,330,000 5,948,000 7,841,000
========== ========== ========== ========== ==========
Dilutive:
Net income per common share - assuming dilution 0.30 0.36 0.37 0.58 0.64
========== ========== ========== ========== ==========
Weighted average common and common equivalent
shares outstanding - assuming dilution 3,921,000 5,954,000 6,385,000 6,359,000 8,213,000
========== ========== ========== ========== ==========
</TABLE>
<PAGE>
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
IMPATH ACQUIRES PROFITABLE ONCOLOGY REGISTRY COMPANY TO ENHANCE CANCER
INFORMATION SERVICES CAPABILITIES AND BROADEN CLIENT BASE
NEW YORK, NY, AUGUST 31, 1998 - - IMPATH INC. (NASDAQ NM: IMPH) announced today
that it has acquired Medical Registry Services, Inc. ("MRS"), a leading
developer and marketer of cancer registry software products that are currently
utilized in over 400 hospitals throughout the United States. The products are
used to collect and manage critical diagnostic, treatment, follow-up and
outcomes data on cancer patients. The two companies, which currently have
approximately 200 common clients, began a relationship through a strategic joint
venture in January 1997. This acquisition will significantly enhance IMPATH's
oncology information capabilities by matching its diagnostic and prognostic data
with treatment and outcomes information from MRS. Additionally, it provides
IMPATH with an ongoing link to hospitals as its ability to supply them with
critical information for optimal disease management will continue to expand.
MRS has highly profitable, annualized revenues of approximately $3,750,000
derived from licensing fees paid by hospitals utilizing its proprietary tumor
registry software.
Exclusive of approximately $675,000 of transaction related fees which will be
expensed in the third quarter, the transaction, which will be accounted for
under the pooling of interests method, is expected to be accretive to earnings
on a prospective basis. MRS shareholders will receive 550,000 shares of IMPATH
common stock in exchange for all of the outstanding shares of MRS. Headquartered
in Hackensack, New Jersey, MRS has approximately 30 employees and will continue
to operate from its current location.
Commenting on the announcement, Dr. Anu D. Saad, IMPATH's President and Chief
Executive Officer, said, "From our association with MRS over the last 18 months,
we
<PAGE>
recognized the excellent growth prospects and synergy between this premier
cancer information registry company and IMPATH's unique information resources.
This new strategic relationship further
- M O R E -
strengthens our connection with hospitals and physicians in providing them with
patient-specific cancer information and in linking that information with
treatment decisions and patient outcomes.
"We gain complete access to valuable, evolving tumor registry data while our
national sales force builds upon their ongoing sales and marketing efforts to
broaden MRS' penetration into hospitals nationwide. Additionally, MRS' expertise
and resources complement and enhance our efforts to bring an interactive
software interface to our clients that will maximize information flow and
sophisticated data collection.
"We are especially pleased to have MRS join the IMPATH family as we continue to
expand and market our substantial oncology database to pharmaceutical,
biotechnology and contract research organizations to aid in development of new,
biologically relevant, cancer therapies. The MRS acquisition will enable us to
better leverage our unique information resources in the effective management of
cancer and thereby help optimize the outcome for the cancer patient."
IMPATH Inc. is a leading source of cancer information and analyses with a
database of over 350,000 analyzed cancer cases to date. IMPATH uses
sophisticated technologies to provide patient-specific cancer diagnostic,
prognostic and treatment information to more than 4,000 physicians specializing
in the treatment of cancer patients, in over 1,650 hospitals and 140 oncology
practices.
<PAGE>
This press release contains forward-looking statements about IMPATH's projected
growth and its plans for expansion. IMPATH's ability to achieve its projected
growth is dependent on a variety of factors, many of which are outside of
management's control. Some of the most significant factors, alone or in
combination, would be the failure to integrate the businesses acquired by IMPATH
successfully, unanticipated disagreements with IMPATH's joint venture partners,
an unanticipated slowdown in the health care industry (as a result of cost
containment measures, changes in governmental regulation or other factors), an
unanticipated failure in the commercialization of IMPATH's evolving outcomes-
oriented database, or an unanticipated loss of business. Accordingly, there can
be no assurances that IMPATH will achieve its goals for expansion and growth.
Contact: Iris D. Daniels, Director of Investor Relations, IMPATH Inc. (212)
698-0300
* * * * * * *
<PAGE>
Exhibit 99.2
FOR IMMEDIATE RELEASE
IMPATH INC. ANNOUNCES THIRD QUARTER RESULTS
Record Revenues, Net Income and Case Volume for 19th Consecutive Quarter
Revenues and Net Income Increase 51% and 164%, respectively, over 1997 Figures
NEW YORK, NEW YORK, OCTOBER 26, 1998 - IMPATH INC. (NASDAQ NM: IMPH) today
announced results for the third quarter and nine months ended September 30,
1998, marking the Company's nineteenth consecutive quarter of record revenues,
net income and case volume. During the quarter, the Company completed its
acquisition of Medical Registry Services, Inc. ("MRS"). The results that follow
have been restated for all periods to include the results of the Company and MRS
in accordance with pooling-of-interests accounting.
The Company reported record third quarter revenues of $15,235,000, a 51%
increase from the previous year's third quarter revenues of $10,096,000. Net
income of $2,221,000 was reported during the third quarter, an increase of 164%
compared with 1997 third quarter net income of $840,000. Excluding one-time
charges and tax benefits associated with the MRS transaction, IMPATH's net
income was $2,290,000 or $.26 per diluted share. In connection with the MRS
merger during the third quarter of 1998, the Company incurred a one-time expense
for transaction related fees of $750,000 or $.05 per diluted share. In
addition, the Company reduced its provision for income taxes in the third
quarter by $400,000 or $.04 per diluted share related to a deferred tax asset
recorded as part of the pooling transaction. This resulted in reported
earnings for the period of $.25 per diluted share, an increase of 93% compared
to $.13 for the third quarter of 1997. The Company had approximately 8,766,000
weighted average common and common equivalent shares outstanding during the
third quarter of 1998, representing a 37% increase over 6,406,000 weighted
average common and common equivalent shares outstanding for the third quarter of
1997.
For the nine months ended September 30, 1998, the Company reported revenues of
$42,210,000, a 46% increase over 1997 revenues of $28,952,000, net income of
$5,244,000, a 124% increase
- M O R E -
<PAGE>
over $2,346,000 for the first nine months of the prior year, and operating
income of $5,864,000, a 62% increase over $3,623,000 for the first nine months
of 1997. Diluted earnings per
share for the nine months ended September 30, 1998 were $.64, a 73% increase
over $.37 per share in the comparable period of 1997. The Company had
approximately 8,213,000 weighted average common and common equivalent shares
outstanding during the first nine months of the year, representing a 29%
increase over 6,385,000 weighted average common and common equivalent shares
outstanding for the same period in 1997.
Commenting on the results, Dr. Anu D. Saad, President and Chief Executive
Officer stated, "We are very pleased to report our 19th consecutive quarter of
record revenues, net income and case volume growth. The strength of our core
business and our ability to increase penetration of our targeted client base and
gain market share are integral to our long-term growth strategy.
"Our three recent acquisitions, Biologic & Immunologic Science Laboratories
("BIS"), MRS and Physician Choice ("PCI") have continued to strengthen our core
business and fortify our connection with hospitals and physicians, while
enabling us to simultaneously expand our evolving database of more than 400,000
analyzed cases. Our broadened expertise and capabilities in oncology and in
providing critical information and sophisticated analyses to biotechnology,
pharmaceutical and contract research organizations involved in the development
and marketing of new, biologically relevant cancer treatments is another key
component in our strategy. We remain committed to our goal of being the
definitive resource for cancer information and in assisting those involved in
the management of cancer to maximize the outcome for cancer patients."
IMPATH Inc. is a leading source of cancer information and analyses with a
database of more than 400,000 analyzed cancer cases to date. IMPATH uses
sophisticated technologies to provide patient-specific cancer diagnostic,
prognostic and treatment information to more than 4,000 physicians specializing
in the treatment of cancer patients, in over 1,650 hospitals and 140 oncology
practices.
This press release contains forward-looking statements about IMPATH's projected
growth and its plans for expansion. IMPATH's ability to achieve its projected
growth is dependent on a variety of factors, many of which are outside of
management's control. Some of the most significant factors, alone or in
combination, would be the failure to integrate
<PAGE>
the businesses acquired by IMPATH successfully, unanticipated disagreements with
IMPATH's joint venture partners, an unanticipated slowdown in the health care
industry (as a result of cost containment measures, changes in governmental
regulation or other factors), an unanticipated failure in the commercialization
of IMPATH's evolving outcomes-oriented database, or an unanticipated loss of
business. Accordingly, there can be no assurances that IMPATH will achieve its
goals for expansion and growth.
Contact: Iris D. Daniels, Director of Investor Relations, IMPATH Inc. (212)
698-0300
(Tables Follow)
<PAGE>
IMPATH Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
-------------------------------------------
1998 1997*
Revenues: -------------------- ---------------------
<S> <C> <C>
Net diagnostic and prognostic services $14,884,957 $10,041,385
Contract laboratory services 350,523 54,415
----------- -----------
Total revenues 15,235,480 10,095,800
Operating expenses:
Salaries and related costs 5,719,199 4,372,607
Selling, general and administrative 6,795,240 4,343,413
One time charges related to pooling 750,000 -
----------- -----------
Total operating expenses 13,264,439 8,716,020
Income from operations 1,971,041 1,379,780
Other income, net 931,269 190,461
----------- -----------
Income before income tax expense 2,902,310 1,570,241
Income tax expense 681,314 729,966
----------- -----------
Net income $ 2,220,996 $ 840,275
Net income and pro forma net income per share:
Basic $ 0.26 $ 0.13
----------- -----------
Diluted $ 0.25 $ 0.13
----------- -----------
Weighted average common and common
equivalent shares outstanding:
Basic 8,477,000 6,384,000
----------- -----------
Diluted 8,766,000 6,406,000
----------- -----------
</TABLE>
* Restated in accordance with pooling-of-interests accounting
<PAGE>
IMPATH INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
----------------------------------------
1998* 1997*
----- -----
<S> <C> <C>
Revenues:
Net diagnostic and prognostic services $41,594,327 $28,841,783
Contract laboratory services 615,833 110,363
----------- -----------
Total revenues 42,210,160 28,952,146
Operating expenses:
Salaries and related costs 16,928,271 12,471,324
Selling, general and administrative 18,667,848 12,857,813
One time charges relating to pooling 750,000 -
----------- -----------
Total operating expenses 36,346,119 25,329,137
Income from operations 5,864,041 3,623,009
Other income, net 2,057,145 581,703
----------- -----------
Income before income tax expense 7,921,186 4,204,712
Income tax expense 2,677,366 1,858,574
----------- -----------
Net income $ 5,243,820 $ 2,346,138
=========== ===========
Net income and pro forma net income per share
Basic $ 0.67 $ 0.37
----------- -----------
Diluted $ 0.64 $ 0.37
----------- -----------
Weighted average common and common
equivalent shares outstanding
Basic 7,841,000 6,330,000
----------- -----------
Diluted 8,213,000 6,385,000
----------- -----------
</TABLE>
* Restated in accordance with pooling-of-interests accounting
<PAGE>
IMPATH INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS*
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
(Unaudited) (Audited)
------------- ------------
<S> <C> <C>
ASSETS
Total current assets $ 95,725,785 $27,708,419
Fixed assets, less accumulated depreciation
and amortization 18,288,378 10,623,004
Other assets 11,871,124 8,618,958
------------ -----------
Total assets $125,885,287 $46,950,381
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $ 7,543,753 $ 6,910,888
Capital lease obligations, net of current portion 3,173,447 2,451,587
Loan payable, net of current portion 528,539 274,000
Total stockholders' equity $114,639,548 $37,313,906
------------ -----------
Total liabilities and stockholders' equity $125,885,287 $46,950,381
============ ===========
</TABLE>
* Restated in accordance with pooling-of-interests accounting
