<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q/A
(MARK ONE)
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 0-14746
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Health Images, Inc.
- ------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 58-1485618
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
8601 Dunwoody Place, Bldg. 200, Atlanta, Georgia 30350
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE 770/587-5084
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- --------------------------------------------------------------------------------
FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT
Indicate by check [x] 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
----------- ---------
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes No
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APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date 11,425,498.
<PAGE>
HEALTH IMAGES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1996
ASSETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
----------------- -----------------
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents $ 2,886,800 $ 3,204,700
Marketable Securities --- 267,400
Trade Receivables (Less Allowance for Doubtful Accounts and
Discounts of $10,600,200 in 1996, and $10,565,200 in 1995) 24,585,500 24,537,600
Other Receivables 1,232,800 806,700
Inventories 309,600 316,500
Deferred Income Taxes 2,881,100 2,826,800
Other 2,806,000 2,187,600
----------------- -----------------
Total Current Assets 34,701,800 34,147,300
----------------- -----------------
PROPERTY AND EQUIPMENT
Total Property and Equipment 163,268,100 155,103,800
Accumulated Depreciation 65,996,000 60,647,700
----------------- -----------------
Cost Less Accumulated Depreciation 97,272,100 94,456,100
----------------- -----------------
OTHER ASSETS
Intangible Assets 46,397,400 47,058,700
Unclassified 500,000 650,300
----------------- -----------------
Total Other Assets 46,897,400 47,709,000
----------------- -----------------
TOTAL ASSETS $178,871,300 $176,312,400
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current Portion of Long-Term Debt $ 16,323,200 $ 16,352,500
Accounts Payable 8,247,100 9,369,400
Accrued Expenses 9,893,400 8,450,700
Unearned Revenue 515,500 135,500
----------------- -----------------
Total Current Liabilities 34,979,200 34,308,100
----------------- -----------------
LONG-TERM DEBT 43,279,800 45,000,500
----------------- -----------------
DEFERRED INCOME TAXES 11,373,000 11,711,300
----------------- -----------------
OTHER LONG-TERM LIABILITIES 255,300 245,700
----------------- -----------------
MINORITY INTEREST 1,531,100 1,258,100
----------------- -----------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common Stock - $.01 Par Value - 40,000,000 Shares Authorized -
13,400,574 Shares Issued as of June 30, 1996, and 13,380,052
as of December 31, 1995 134,000 133,800
Additional Paid-In Capital 77,807,600 77,674,400
Retained Earnings 24,977,300 21,288,000
Accumulated Translation Adjustment (513,800) (508,700)
Treasury Stock - 1,979,512 Shares at Cost as of June 30, 1996,
and 1,957,300 as of December 31, 1995 (14,952,200) (14,798,800)
----------------- -----------------
Total Stockholders' Equity 87,452,900 83,788,700
----------------- -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $178,871,300 $176,312,400
================ ================
</TABLE>
2
<PAGE>
HEALTH IMAGES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, 1996 JUNE 30, 1995 JUNE 30, 1996 JUNE 30, 1995
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
REVENUE
Net Patient Service Revenue $32,120,500 $31,205,300 $62,292,500 $48,509,900
Engineering Revenue 465,200 848,600 892,500 1,578,400
Other Revenue and Income 679,200 367,300 995,200 571,800
----------------- ----------------- ----------------- -----------------
Total Net Revenue 33,264,900 32,421,200 64,180,200 50,660,100
----------------- ----------------- ----------------- -----------------
COSTS AND EXPENSES
Operating Costs 20,091,800 19,276,500 38,627,200 30,039,400
Depreciation and Amortization Expenses 4,378,600 5,149,900 8,962,100 8,125,200
Provision for Bad Debts 1,239,800 1,249,900 2,476,200 2,022,600
General and Administrative Expenses 2,726,200 2,562,300 5,150,100 3,897,200
----------------- ----------------- ----------------- -----------------
Total Operating Expenses 28,436,400 28,238,600 55,215,600 44,084,400
----------------- ----------------- ----------------- -----------------
Operating Income 4,828,500 4,182,600 8,964,600 6,575,700
Interest Income 23,400 39,800 43,900 71,200
Interest Expense (854,800) (1,245,600) (1,860,600) (1,607,700)
----------------- ----------------- ----------------- -----------------
INCOME FROM CONTINUING OPERATIONS BEFORE
MINORITY INTEREST AND PROVISION FOR INCOME
TAXES 3,997,100 2,976,800 7,147,900 5,039,200
Minority Interest in Income of
Consolidated Entities 221,500 178,900 367,500 221,200
----------------- ----------------- ----------------- -----------------
INCOME FROM CONTINUING OPERATIONS BEFORE
PROVISION FOR INCOME TAXES 3,775,600 2,797,900 6,780,400 4,818,000
Provision for Income Taxes 1,344,700 1,086,600 2,519,600 1,863,200
----------------- ----------------- ----------------- -----------------
NET INCOME FROM CONTINUING OPERATIONS $2,430,900 $1,711,300 $4,260,800 $2,954,800
----------------- ----------------- ----------------- -----------------
DISCONTINUED OPERATIONS
Loss on Discontinued Operations (Net of
Income Taxes) --- 3,000 --- 418,000
Loss on Disposal of Discontinued
Operations (Net of Income Taxes) --- --- --- 744,000
----------------- ----------------- ----------------- -----------------
NET INCOME $2,430,900 $1,708,300 $4,260,800 $1,792,800
================= ================= ================= =================
EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARE
Primary Earnings Per Share
Primary Net Income from Continuing
Operations Per Share $0.21 $0.15 $0.37 $0.25
Discontinued Operations Per Share --- --- --- ($0.10)
----------------- ----------------- ----------------- -----------------
Primary Net Income Per Share $0.21 $0.15 $0.37 $0.15
Fully Diluted Earnings Per Share
Fully Diluted Net Income from
Continuing Operations Per Share $0.21 $0.15 $0.36 $0.25
Discontinued Operations Per Share --- --- --- ($0.10)
----------------- ----------------- ----------------- -----------------
Fully Diluted Net Income Per Share $0.21 $0.15 $0.36 $0.15
WEIGHTED AVERAGE COMMON SHARE AND
COMMON SHARE EQUIVALENTS
Primary 11,702,600 11,578,100 11,669,300 11,610,700
Fully Diluted 11,702,600 11,626,500 11,795,700 11,649,800
</TABLE>
<PAGE>
HEALTH IMAGES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, 1996 JUNE 30, 1995 JUNE 30, 1996 JUNE 30, 1995
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net Income $2,430,900 $1,708,300 $4,260,800 $1,792,800
Adjustments to Reconcile Net Income
to Net Cash
Depreciation 3,580,700 3,512,800 7,348,800 6,104,400
Amortization 797,800 1,637,300 1,613,200 2,021,000
Provision for Bad Debts 1,239,800 1,249,900 2,476,200 2,022,600
Minority Interest 221,400 178,900 367,500 221,200
Deferred Income Taxes (175,100) 341,300 (392,600) 107,400
Increase in Receivables (2,785,400) (1,933,000) (2,950,200) (2,204,900)
(Increase) Decrease in Inventories 28,500 (35,900) 6,900 65,700
Increase (Decrease) in Accounts Payable
and Accrued Expenses (469,800) 830,400 677,400 2,235,500
Curency Exchange Loss --- 257,300 --- 257,300
Gain on Sale of Property and Equipment --- (329,600) --- (329,600)
Other - Net (113,500) 367,900 (238,400) (126,700)
----------------- ----------------- ----------------- -----------------
Net Cash Provided by Operating Activities 4,755,300 7,785,600 13,169,600 12,166,700
----------------- ----------------- ----------------- -----------------
CASH FLOW FROM INVESTING ACTIVITIES
Cash Used to Acquire Investments (124,400) --- (773,500) (56,700)
Proceeds from Investments 1,040,900 --- 1,040,900 281,000
Capital Expenditures (5,684,000) (2,060,300) (10,019,600) (4,183,500)
Acquisition of Imaging Facilities --- (22,752,600) --- (22,752,600)
Proceeds from Sale of Assets --- 989,200 --- 989,200
Payments for Intangibles (838,600) (822,700) (951,900) (1,308,400)
Other-Net (39,000) --- (39,000) (8,500)
----------------- ----------------- ----------------- -----------------
Net Cash Used by Investing Activities (5,645,100) (24,646,400) (10,743,100) (27,039,500)
----------------- ----------------- ----------------- -----------------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Issuing Notes Payable 3,336,600 30,000,000 5,471,700 30,000,000
Cash Used to Retire Debt (3,526,900) (12,208,000) (7,221,700) (15,559,400)
Cash Distributions to Minority Investors
In Limited Partnerships --- (60,300) (55,500) (95,000)
Proceeds from Exercise of Stock Options 16,800 --- 121,900 8,800
Cash Used to Pay Dividends (285,400) (231,800) (571,500) (463,600)
Cash Used to Purchase Treasury Shares (39,100) (488,000) (539,300) (488,000)
Other - Net 50,000 --- 50,000 ---
----------------- ----------------- ----------------- -----------------
Net Cash (Used) Provided by Financing Activities (448,000) 17,011,900 (2,744,400) 13,402,800
----------------- ----------------- ----------------- -----------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 23,800 (44,000) --- 41,400
----------------- ----------------- ----------------- -----------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,314,000) 107,100 317,900 (1,428,600)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 4,200,800 2,268,400 3,204,700 3,804,100
----------------- ----------------- ----------------- -----------------
CASH AND CASH EQUIVALENTS - END OF PERIOD $2,886,800 $2,375,500 $2,886,800 $2,375,500
================= ================= ================= =================
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES
Treasury Stock Reissued in Conjunction
with Employee Benefit Plans $347,400 --- --- ---
Assumption of Liabilities in Conjunction
with Acquisition --- $31,546,900 --- $31,546,900
Redemption of Preferred Stock in Conjunction
with Acquisition --- $11,569,300 --- $11,569,300
</TABLE>
<PAGE>
PART I. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Comparison of the quarter ending June 30, 1996, to the quarter ending June 30,
1995.
Net patient service revenue/1/ increased $915,200, or 2.9%, primarily due
to an increase in net revenue at imaging centers that were in operation for both
the 1995 and 1996 periods ("same center revenue") of $1,987,400, or 6.6%,
partially offset by the disposition of three imaging centers during the prior
twelve month period. Two of these clinics, located in Carrollton, Georgia, and
Chattanooga, Tennessee, were acquired from MedAlliance, and their sale was
planned at the time of the acquisition due to poor operating performance. The
third clinic, located in Williamsport, Pennsylvania, was sold to a local
hospital alliance, and the Company entered into a radiology management fee
agreement based on collections of the facility. These revenues are included in
miscellaneous revenue in the Company's financial statements and are
contractually limited to a maximum of $750,000 per year.
Engineering revenue decreased $383,400, or 45.2%, primarily due to
decreased service revenue. Other revenue and income increased $311,900, or
84.9%.
Operating costs increased by $815,300, or 4.2%, primarily due to increased
expenses associated with higher patient volumes, offset by the elimination of
costs associated with the three disposed centers. Depreciation and amortization
expenses decreased $771,300, or 15.0%, due to purchase price allocation
adjustments related to the MedAlliance clinic acquisition and the elimination of
depreciation and amortization charges related to the disposed clinics. The
Company's provision for bad debt was $1,239,800, or 3.9% of net patient service
revenue in the 1996 period as compared to $1,249,900, or 4.0%, in 1995.
Provisions for bad debt results from required write-offs of accounts management
deems to be uncollectible. Management expects future bad debt experience to be
comparable to these results. General and administrative expenses increased
$163,900, or 6.4%, primarily due to the centralized billing and collections
operation acquired from MedAlliance and increased costs related to the Company's
expanded volume of business. General and Administrative expenses as a
percentage of net revenue were 8.2% in the 1996 period as compared to 7.9% in
1995.
Interest income decreased by $16,400, or 41.2%, due to lower cash
balances. Interest expense decreased by $390,800, or 31.4%, due to lower
amounts of debt outstanding resulting from principal repayments, negotiation of
favorable interest rates on the
- ---------------
/1/ Net patient service revenue represents imaging revenue reduced by
contractual adjustments related to discount arrangements with third party
payers. Such discount arrangements are customary in the health care industry
and are, in the opinion of management, necessary for competitive reasons.
<PAGE>
Company's primary bank facilities, and increased capitalized interest associated
with the manufacture of the Company's HI STAR (R) MRI upgrade. Minority interest
in income of consolidated entities increased by $42,600, or 23.8%, primarily due
to increased profitability at the Company's partnership facilities. Income taxes
increased by $258,100, or 23.8%, primarily due to higher pretax income. Income
taxes as a percentage of pretax income decreased to 35.6% in the 1996 period as
compared to 38.8% in the 1995 period due to capital loss carryforwards available
in the 1996 period. Management expects the Company's tax rate to approximate
37.2% for the remainder of 1996.
Net income from continuing operations increased $719,600, or 42.1%, to
$2,430,900 in the 1996 period from $1,711,300 in 1995. Primary and fully diluted
earnings from continuing operations increased $0.06 per share, or 40.0%, to
$0.21 in the 1996 period as compared to $0.15 in 1995. Earnings per share were
calculated using 11,702,600 primary and fully diluted weighted average common
share equivalents for the 1996 period as compared to 11,578,100 primary and
11,626,500 fully diluted share equivalents in 1995.
The record net income and earnings per share recorded by the Company for
the quarter reflect the realization of merger synergies from the MedAlliance
clinic acquisition, expansion of the services and modalities offered at its
existing imaging centers, and an overall industry strengthening. The Company has
also been successful in disposing of certain underperforming clinic assets
discussed earlier. The diagnostic imaging industry, however, continues to be
intensely competitive. The growth of managed care plans continues to place
downward pressure on imaging reimbursements and has resulted in increased
scrutiny of the appropriateness of referrals for major diagnostic imaging
procedures, such as MRI and CT services, which are the Company's principal
sources of revenue. In addition, the Company may be at a competitive
disadvantage to hospitals and hospital systems which can offer a comprehensive
range of health care services to managed care plans. Management believes,
however, that the Company is relatively better positioned than many of its
competitors because of its lower cost structure, high level of service to
physicians and patients, and lack of reliance upon physician self-referral
practices. The Company's vertical integration results in lower equipment and
construction costs and significantly reduced equipment maintenance costs. The
new HI STAR (R) system will significantly increase the competitiveness of the
Company's technology at a relatively low marginal cost. The Company installed
the first of these systems in April, 1996, and anticipates manufacturing six to
eight additional HI STAR (R) units during the remainder of 1996. Management also
believes that other significant internal growth opportunities and additional
acquisitions may be available near term.
<PAGE>
Comparison of the six months ended June 30, 1996, to the six months ended June
30, 1995.
Net patient service revenue increased $13,782,600, or 28.4%, primarily due
to the MedAlliance clinic acquisition effective April 1, 1995, and an increase
in same center revenue of $2,222,000, or 4.7%, partially offset by the
disposition of three imaging centers.
Engineering revenue decreased $685,900%, or 43.5%, primarily due to due
decreased service revenue. Other revenue and income increased $423,400, or
74.1%.
Operating costs increased by $8,587,800, or 28.6%, primarily due to
increased expenses associated with the MedAlliance clinic acquisition and higher
patient volumes, partially offset by the elimination of costs associated with
the three disposed centers. Depreciation and amortization expenses increased
$836,900, or 10.3%, due primarily to the MedAlliance clinic acquisition. The
Company's provision for bad debts was $2,476,200, or 4.0% of net patient
services revenue in the 1996 period, as compared to $2,022,600, or 4.2%, in
1995. General and administrative expenses increased $1,252,900, or 32.2%,
primarily due to the centralized billing and collections operation acquired from
MedAlliance and increased cost related to the Company's expanded volume of
business. General and Administrative expenses as a percentage of net revenue
were 8.0% in the 1996 period as compared to 7.7% in 1995.
Interest income decreased by $27,300, or 38.3%, due to lower cash balances.
Interest expense increased by $252,900, or 15.7%, due to debt incurred in
conjunction with the MedAlliance clinic acquisition, partially offset by
principal repayments, negotiation of favorable interest rates on the Company's
primary bank facilities, and increased capitalized interest associated with the
manufacture of the Company's HI STAR (R) MRI upgrade. Minority interest in
income of consolidated entities increased by $146,300, or 66.1%, primarily due
to minority interest acquired from MedAlliance and increased profitability at
the Company's partnership centers. Income taxes increased by $656,400, or 35.2%,
primarily due to higher pretax income. Income taxes as a percentage of pretax
income decreased to 37.2% in the 1996 period as compared to 38.7% in the 1995
period due to capital loss carryforwards available in 1996. Management expects
the Company's tax rate to approximate 37.2% for the remainder of 1996.
Net income from continuing operations increased $1,306,000 or 44.2% to
$4,260,800 in the 1996 period from $2,954,800 in 1995. Primary earnings from
continuing operations increased $0.12 per share, or 48.0%, to $0.37 in the 1996
period as compared to $0.25 in 1995. Fully diluted earnings from continuing
operations increased $0.11 per share, or 44.0%, to $0.36 in the 1996 period as
compared to $0.25 in 1995. Primary net income increased $0.22, or 146.7%, to
$0.37 in the 1996 period as compared to $0.15 in 1995. Fully diluted net income
increased $0.21, or 140.0%, to $0.36 in the 1996 period as compared to $0.15 in
1995. Earnings per share were
<PAGE>
calculated using 11,669,300 primary and 11,795,700 fully diluted weighted
average common share equivalents for the 1996 period as compared to 11,610,700
primary and 11,649,800 fully diluted share equivalents in 1995.
INFLATION
The impact of inflation and changing prices on the Company has, to date,
been primarily limited to salary increases and has not been material to the
Company's operation. In the event of increased inflation, management believes
that the Company may not be able to raise the prices for its goods and services
by an amount sufficient to offset cost inflation.
Management believes that reimbursements for its services will continue to
decline in the future, even in an otherwise inflationary environment. The rate
of decline in reimbursement levels, however, has slowed recently and may
indicate some pricing stabilization. The Company has historically responded to
reimbursement declines by lowering its capital costs and by increasing the
volume of its business.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $13,169,600 for the six
months ended June 30, 1996, an increase of $1,002,900 or 8.2% from $12,166,700
in the prior year period. This increase is primarily due to an increase in net
income and higher depreciation and amortization charges (non-cash expenses)
resulting from the MedAlliance acquisition, partially offset by changes in
working capital accounts. Net trade receivables increased by $47,900 to
$24,585,500 during the six months ended June 30, 1996, primarily due to
increased patient revenue. As of June 30, 1996, the Company's average age of
patient receivables was 73 days as compared to 71 days as of March 31, 1996, 74
days as of December 31, 1995 and 73 days as of June 31, 1995. Management
believes this average age of patient receivables to be within industry norms and
significantly better than many of its competitors.
The Company reduced net outstanding debt by $1,750,000 during the six
months ended June 30, 1996, to $59,603,000. Cash and cash equivalents decreased
by $317,900 for the six months ended June 30, 1996, to $2,886,800.
The Company had available $9,366,700 under its $12,000,000 bank line at
June 30, 1996. During the six months ended June 30, 1996, the Company borrowed
$1,690,500 to finance the purchase of medical equipment used in the expansion of
its center business and $1,688,000 to finance the ongoing construction of its
new corporate offices.
Capital expenditures for the six months ended June 30, 1996, were
$10,019,600. The principal capital expenditures for the remainder of 1996 will
be purchases and construction of imaging equipment, upgrades and enhancements
for the Company's HI Standard(R)
<PAGE>
and HI STAR (R) MRI systems, the expansion and upgrading of certain of the
Company's existing imaging facilities, and the construction of a new corporate
headquarters.
Management considers current cash and liquidity together with cash flows
from operating activities adequate to fund the Company's existing business
operations. The Company may need to restructure its current debt maturities or
borrow additional amounts to fund all of its intended capital expenditures and
expansion plans. Management believes such financing is readily available from
several sources.
At June 30, 1996, the Company had commitments of $5,381,900 on equipment
and construction contracts.
5
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.
There have been no material developments in the legal proceedings
described in the Company's Form 10-K for the fiscal year ended
December 31, 1995.
ITEM 2. Changes in Securities.
None.
ITEM 3. Defaults under Senior Securities.
None.
ITEM 4. Submission of Matters to a Vote of Security Holders.
At the Company's Annual Meeting of Shareholders on May 31, 1996, a
majority of the 11,544,977 shares outstanding on the record date of
May 31, 1996, approved both proposals at issue. The specific
proposals and vote totals are as follows:
Proposal No. 1
To elect the following seven (7) persons for one year terms of office
as members of Health Images' Board of Directors:
Name FOR AGAINST
Robert D. Carl, III 9,622,235 465,265
William E. Whitesell, Ph.D. 9,867,576 219,924
Marc I. Raphaelson, M.D. 9,853,916 233,584
Anthony T. Prescott 9,859,946 227,554
Robert L. Taylor 9,856,416 231,084
Stuart B. Strasner, Sr. 9,857,601 229, 899
Jack O. Greenberg, M.D. 9,853,816 233,684
-6-
<PAGE>
Proposal No. 2.
To ratify and approve Health Images' 1996 Employee Incentive Stock
Option Plan.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
9,013,996 1,046,209 27,295
</TABLE>
Proposal No. 3.
To ratify and approve the 1995 Formula Stock Option Plan for outside
directors.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
9,176,434 864,444 46,622
</TABLE>
Proposal No. 4.
To ratify and approve the grant of non-qualified options to purchase
3,000 shares of Health Images' Common Stock to each of the two (2) non-employee
directors of the Company who joined the Board in 1995
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
9,445,146 600,075 42,279
</TABLE>
Proposal No. 5.
To ratify and approve the appointment by Health Images' Board of
Directors of Joseph Decosimo and Company as Health Images' independent public
accountants for the fiscal year ending December 31, 1996.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
10,025,398 46,372 15,730
</TABLE>
-7-
<PAGE>
ITEM 5. Other Information.
None.
ITEM 6. Exhibits and Reports on Form 8-K.
a. Exhibits required to be filed by Item 601 of Regulation S-K are
included as Exhibits to this report as follows:
Exhibit
Number
-------
4 -- Instruments defining rights of security holders are
incorporated herein by reference to Exhibit 4(c)
included in Registrant's Annual Reports on Form 10-K
for fiscal year ended December 31, 1987; to Exhibit
10(b) to Registrant's Annual Report on Form 10-K for
fiscal year ended December 31, 1988; to Exhibit 1 to
Registrant's Form 8-K filed June 20, 1989 and to
Exhibits 3(a) and 3(b) to Registrant's Annual Report on
Form 10-K for fiscal year ended December 31, 1989.
b. Reports on Form 8-K -- The following reports on Form 8-K have
been filed by Registrant during the quarter ended June 30, 1995:
None
-8-
<PAGE>
EXHIBIT INDEX
Exhibit Page
Number Description Number
- ------- ----------- ------
4 -- Instruments defining rights of security holders are
incorporated herein by reference to Exhibit 4(c)
included in Registrant's Annual Reports on Form 10-K
for fiscal year ended December 31, 1987; to Exhibit
10(b) to Registrant's Annual Report on Form 10-K for
fiscal year ended December 31, 1988; to Exhibit 1
to Registrant's Form 8-K filed June 20, 1989 and to
Exhibits 3(a) and 3(b) to Registrant's Annual Report
on Form 10-K for fiscal year ended December 31, 1989.
-9-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HEALTH IMAGES, INC.
(REGISTRANT)
Date: August 12, 1996 By: /s/ Robert D. Carl, III
-------------------- ----------------------------
Robert D. Carl, III
Chairman, President and
Chief Executive Officer
By: /s/ Ron L. Clark
----------------------------
Ron L. Clark
Treasurer and Controller
(Principal Accounting
Officer)
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