<PAGE>
Form 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
(Mark One) Washington, D.C. 20549
AMENDMENT NO. 1
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
--------------------------
( ) 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 1-14142
Renal Treatment Centers, Inc.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 23-2518331
- ---------------------------------------- --------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1180 W. Swedesford Road
Building 2, Suite 300
Berwyn, PA 19312
- ---------------------------------------- --------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 610-644-4796
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 Outstanding at May 31, 1996
----- -----------------------------------
Common Stock, Par Value $.01 23,593,986 shares
<PAGE>
RENAL TREATMENT CENTERS, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
<S> <C>
Consolidated Statements of Income--
Three months ended March 31, 1996
and 1995 .................................................. 3
Consolidated Balance Sheets--
March 31, 1996 and December 31, 1995 ...................... 4
Consolidated Statements of Cash Flows--
Three months ended March 31, 1996 and 1995 ................ 5
Notes to Consolidated Financial Statements ................ 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations ................................................ 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K .......................... 10 - 11
SIGNATURES ........................................................... 12
EXHIBITS ............................................................. 13
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Renal Treatment Centers, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Net patient revenue $49,204,164 $36,314,340
Patient care costs 23,706,233 17,798,201
- --------------------------------------------------------------------------------
Operating profit 25,497,931 18,516,139
General and administrative
expense 12,903,283 10,040,945
Provision for doubtful
accounts 1,535,944 959,512
Depreciation and amortization 3,536,388 2,699,353
Merger expenses 1,708,247 1,587,542
- --------------------------------------------------------------------------------
Income from operations 5,814,069 3,228,787
Interest expense, net 665,808 630,655
- --------------------------------------------------------------------------------
Income before income taxes 5,148,261 2,598,132
Provision for income taxes 1,990,207 564,963
- --------------------------------------------------------------------------------
Net income $3,158,054 $2,033,169
- --------------------------------------------------------------------------------
Net income per common and $0.13 $0.09
common stock equivalent ===== =====
Weighted average number of
common and common stock
equivalents outstanding 24,278,435 21,531,600
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Renal Treatment Centers, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
March 31, December 31,
1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash $2,657,638 $7,624,259
Accounts receivable, net of allowance for
doubtful accounts of $3,500,000 in 1996 and
$3,200,000 in 1995 56,090,971 51,351,999
Inventories 3,522,878 2,683,234
Deferred taxes 1,412,519 819,835
Prepaid expenses and other current assets 1,023,065 1,391,775
- -------------------------------------------------------------------------------
Total current assets 64,707,071 63,871,102
- -------------------------------------------------------------------------------
Property and equipment (net of accumulated
depreciation of $14,253,577 in 1996
and $10,378,141 in 1995.) 24,952,573 20,087,284
Intangibles (net of accumulated amortization of
$24,475,492 in 1996 and $22,263,385 in 1995.) 86,055,057 86,341,433
Deferred taxes, non-current 1,749,754 1,749,754
- -------------------------------------------------------------------------------
Total assets $177,464,455 $172,049,573
===============================================================================
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $4,742,845 $4,539,635
Accounts payable 5,416,174 4,222,147
Accrued compensation 3,300,300 2,670,384
Accrued expenses 4,469,349 6,576,600
Accrued income taxes 2,320,777 2,218,692
Accrued interest 745,647 1,087,415
- -------------------------------------------------------------------------------
Total current liabilities 20,995,092 21,314,873
- -------------------------------------------------------------------------------
Long-term debt, net 40,503,340 41,654,966
Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000
shares authorized: none issued
Common stock, $.01 par value, 45,000,000
shares authorized: issued and
outstanding 23,619,076 and 21,727,312
shares in 1996 and 1995, respectively. 236,191 217,273
Additional paid-in capital 83,619,838 83,006,891
Retained earnings 32,504,070 26,249,646
- -------------------------------------------------------------------------------
116,360,099 109,473,810
- -------------------------------------------------------------------------------
Less treasury stock, 37,202 shares in 1995
and 1996, at cost (394,076) (394,076)
- -------------------------------------------------------------------------------
115,966,023 109,079,734
- -------------------------------------------------------------------------------
Total liabilities and stockholders' equity $177,464,455 $172,049,573
===============================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Renal Treatment Centers, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months ended
March 31,
1996 1995
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $3,158,054 $2,033,169
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 3,547,223 2,715,700
Provision for doubtful accounts 1,535,944 959,512
Equity in (earnings) losses from affiliates 242,372 1,645
Changes in operating assets and liabilities,
net of effects of companies acquired:
Accounts receivable (2,931,954) (4,186,291)
Inventories (813,448) 290,029
Prepaid expenses and other current assets 431,081 32,545
Accounts payable and accrued expenses (3,960,540) 932,640
Accrued income taxes 102,085 509,113
- -----------------------------------------------------------------------------------------
Net cash provided by operating activities 1,310,817 3,288,062
- -----------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (2,005,302) (2,037,437)
Purchase of businesses, net of cash acquired (2,010,241) (5,144,291)
Purchase of investments - 979,104
Other (684,373) (333,281)
- -----------------------------------------------------------------------------------------
Net cash used in investing activities (4,699,916) (6,535,905)
- -----------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from long-term debt borrowings 1,500,000 8,000,000
Repayments of debt (3,587,473) (4,944,401)
Proceeds from issuance of common stock 524,581 58,806
Payment of dividends - (123,812)
Payments on capital lease obligations (978,329) (256,964)
Cash portion of consideration received for
common stock 963,699 -
- -----------------------------------------------------------------------------------------
Net cash (used in) provided by financing
activities (1,577,522) 2,733,629
- -----------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (4,966,621) (514,214)
Cash and cash equivalents at beginning of period 7,624,259 2,152,322
- -----------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $2,657,638 $1,638,108
- -----------------------------------------------------------------------------------------
Supplemental disclosures of cash flows information:
Cash paid during the period for:
Interest expense $1,088,054 $316,391
Income taxes $2,824,703 $389,577
Noncash financing activities:
Reduction of note issued in connection with
purchase of business - $135,900
Acquisition of treasury stock in connection
with payroll taxes resulting from exercise
of stock options - $346,857
Capital lease obligations entered into $416,950 -
Issuance of common stock in connection with
purchase of business $89,137 -
Noncash investing activities:
Net assets relating to pooling transactions $3,096,370 -
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
Renal Treatment Centers, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
1. BUSINESS ACQUISITIONS:
On February 20, 1996, the Company acquired Intercontinental Medical Services,
Inc. ("IMS"), which operated four dialysis facilities in Hawaii. The
transaction was accounted for as a pooling of interests. Accordingly, the
Company's financial statements include the results of IMS as of January 1, 1996.
In total, 1,047,464 shares of the Company's common stock were exchanged for all
outstanding shares of IMS.
On February 29, 1996, the Company acquired Midwest Dialysis Units and its
affiliates (collectively "MDU"), which operated 11 dialysis facilities in
Oklahoma. The transaction was accounted for as a pooling of interests.
Accordingly, the Company's financial statements include the results of MDU as of
January 1, 1996. In total 767,168 shares of the Company's common stock were
exchanged for all outstanding shares of MDU.
Prior year financial statements have not been restated to reflect these
transactions because the impact on the Company's financial statements of such
transactions is not material.
2. BASIS OF PRESENTATION:
The accompanying unaudited consolidated financial statements have been prepared
by the Company in accordance with generally accepted accounting principles for
interim financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting only of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the three
months ended March 31, 1996 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1996. The interim consolidated
financial statements should be read in conjunction with the consolidated
financial statements and footnotes thereto included in the Company's Form 10-K
filed with the Securities and Exchange Commission on April 1, 1996.
3. COMMITMENTS AND CONTINGENCIES:
The Company is a party to certain legal actions arising in the ordinary course
of business. The Company believes it has adequate legal defenses and/or
insurance coverage for these actions and that the ultimate outcome of these
actions will not have a material adverse impact on the Company's results of
operations, financial condition or liquidity.
<PAGE>
Item 2. Renal Treatment Centers, Inc. and Subsidiaries
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Overview
Renal Treatment Centers, Inc. is a leading, high-quality provider of dialysis
treatments and ancillary services to patients suffering from chronic kidney
failure, primarily in its freestanding outpatient dialysis treatment centers or
in the patient's home. The Company also provides acute inpatient dialysis
services to hospitals. As of April 30, 1996, the Company operated 96 outpatient
dialysis centers in 21 states, the District of Columbia and the Republic of
Argentina and provided dialysis services for approximately 6,200 patients. In
addition, the Company provided inpatient dialysis services at 68 hospitals.
Results of Operations
The following table sets forth, for the periods indicated, selected financial
information expressed as a percentage of net patient revenue and the period-to-
period percentage changes in such information.
<TABLE>
<CAPTION>
Percentage of
Net Patient Revenue
Three Months Ended Period-to-Period
March 31, Percentage Change
- --------------------------------------------------------------------------------
1996 1995 1996 vs. 1995
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net patient revenue 100.0% 100.0% 35.5%
Patient care costs 48.2% 49.0% 33.2%
General and administrative
expense 26.2% 27.7% 28.5%
Provision for doubtful accounts 3.1% 2.6% 60.1%
Depreciation and amortization expense 7.2% 7.4% 31.0%
Merger expenses 3.5% 4.4% 7.6%
Income from operations 11.8% 8.9% 80.1%
Interest expense, net 1.4% 1.7% 5.6%
Provision for income taxes 4.0% 1.6% 252.3%
Net income 6.4% 5.6% 55.3%
- ------------------------------------------------------------------------------
</TABLE>
Three months ended March 31, 1996 Compared to Three Months Ended March 31, 1995
Net Patient Revenue. Net patient revenue for the three months ended March 31,
1996 was $49,204,164 as compared to $36,314,340 for the same period in 1995,
representing an increase of 35.5%. Of this increase, $2,494,843, or 19.4%, was
attributable to the revenue generated from the operations of eight centers and
certain acute care agreements acquired in three separate purchase transactions
from March through December 1995, and $6,355,145, or 49.3%, was attributable to
the acquisition of various facilities and the development of new dialysis
centers ("de novo developments") during the first quarter of 1996. Of the
$4,039,836 remaining, $2,553,051 was attributable to an increase in same-center
treatments and $1,486,785 was attributable to an increase in the average same-
center revenue per treatment, which, in turn, was due to an increase in the
administration of EPO and other ancillary revenue items and and an improvement
in the Company's payor mix.
Patient Care Costs. Patient care costs increased 33.2% to $23,706,233 for the
three months ended March 31, 1996 from $17,798,201 for the same period in 1995.
The increase was principally the result of acquisitions that occurred subsequent
to the first quarter of 1995. However, as a percentage of net patient revenue,
patient care costs decreased to 48.2% for the three months ended March 31, 1996
from 49.0% for the same period in 1995. This
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations (continued)
decrease was primarily related to the increase in net revenue per treatment. The
increase in net revenue per treatment was offset in part by the additional costs
related to the increased administration of reimbursable drugs.
General and Administrative Expense. General and administrative expense increased
$2,862,338, or 28.5%, to $12,903,283 for the three months ended March 31, 1996,
as compared to $10,040,945 for the same period in 1995. This increase was
primarily the result of additional facility operating costs as well as
additional corporate and facility personnel required to support the centers
acquired and opened during 1995 and 1996. As a percentage of net patient
revenue, these expenses were approximately 26.2% for the three months ended
March 31, 1996, as compared to 27.7% for the same period in 1995. The decrease
as a percentage of net patient revenue was attributable to the Company's ability
to maintain certain support costs, while increasing net patient revenue through
acquisitions, internal growth and de novo developments.
Provision for Doubtful Accounts. Provision for doubtful accounts increased
$576,432, or 60.1%, to $1,535,944 for the three months ended March 31, 1996, as
compared to $959,512 for the same period in 1995. This increase was principally
a result of the additional net patient revenue generated from acquisitions that
occurred subsequent to the first quarter of 1995. As a percentage of net patient
revenue the provision for doubtful accounts increased to 3.1% for the three
months ended March 31, 1996 from 2.6% for the same period in 1995.
Depreciation and Amortization Expense. Depreciation and amortization expense
increased $837,035, or 31.0%, to $3,536,388 for the three months ended March 31,
1996, as compared to $2,699,353 for the same period in 1995. The increase was
due to the acquisition of various facilities and de novo developments since
March 1995. As a percentage of net patient revenue, depreciation and
amortization expense was 7.2% for the three months ended March 31, 1996, as
compared to 7.4% for the same period in 1995.
Merger Expenses. Merger expenses represent expenses incurred in connection with
the mergers with (i) Healthcare Corporation and its affiliates, (ii) IMS and
(iii) MDU, which were completed on March 6, 1995, February 20, 1996 and February
29, 1996, respectively, and were accounted for under the pooling-of-interests
method of accounting. These expenses included investment banking, legal,
accounting and other fees and expenses.
Income from Operations. Income from operations increased 80.1% to $5,814,069 for
the three months ended March 31, 1996 from $3,228,787 for the same period in
1995. The increase was due to the increase in net patient revenue from acquired
businesses and same-center growth, which was greater than the increases in
patient care costs, general and administrative expense and depreciation and
amortization expense related to such acquired businesses.
Interest Expense, Net. Interest expense, net was $665,808 for the three months
ended March 31, 1996 as compared to $630,655 for the same period in 1995. The
increase in interest expense, net was attributable to the additional borrowings
for the funding of acquisitions that were completed in 1995 and 1996 that
remained outstanding during the three months ended March 31, 1996.
Provision for Income Taxes. Provision for income taxes increased to $1,990,207
for the three months ended March 31, 1996 from $564,963 for the same period in
1995. For the three months ended March 31, 1996, the Company's effective tax
rate was 38.7%, compared to an effective tax rate of 21.7% during the same
period in 1995. The increase in the effective tax rate was primarily
attributable to the one-time tax benefit of $325,000 recorded in the first
quarter of 1995 as a result of the merger with Healthcare Corporation and its
affiliates. In addition, the Company incurred a one-time tax charge of $85,350
related to the merger with MDU recorded in the first quarter of 1996.
Net Income. Net income increased 55.3% to $3,158,054 for the three months ended
March 31, 1996 from $2,033,169 for the same period in 1995. The increase was due
to each of the items discussed above.
Liquidity and Capital Resources
The Company requires capital for the acquisition of dialysis centers, for the
expansion of operations of its existing dialysis centers, including the
replacement of equipment and addition of leasehold improvements, for the
integration of new centers into its network of existing dialysis services and
for meeting working capital requirements.
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations (continued)
During the three months ended March 31, 1996, expenditures for acquisitions
totalled $2,010,241, compared to $5,144,291 for acquisitions for the three
months ended March 31, 1995. The expenditures in 1996 resulted from the
acquisition of one center in March 1996, as compared to the expenditures in 1995
which resulted from the acquisition of five centers in March 1995. For the three
months ended March 31, 1996 and 1995, capital expenditures were $2,005,302 and
$2,037,437, respectively. Cash from operations before investing and financing
activities was $1,310,816 and $3,288,062 for the three months ended March 31,
1996 and 1995, respectively. The principal sources of the Company's liquidity
during the first three months of 1996 were earnings and additional external
borrowings under the Company's revolving credit agreement with a consortium of
banks. The Company had cash and cash equivalents of $2,657,638 at March 31,
1996.
The Company's loan and revolving credit agreement with a consortium of
banks (the "Credit Agreement") provides for a $68.125 million revolving
credit/term facility available to fund acquisitions and general working capital
requirements, on which $33,675,000 and $33,175,000 was outstanding at December
31, 1995 and March 31, 1996, respectively, and a term loan payable in quarterly
installments, of which $3,750,000 and $3,125,000 was outstanding as of December
31, 1995 and March 31, 1996, respectively. The revolving credit/term facility
converts into a term loan in September 1997 that is payable in 16 equal
quarterly installments commencing December 1997 through September 2001.
Borrowings under the Credit Agreement bear interest, at the Company's option, at
either (i) the agent bank's base rate, adjusted by the applicable margin, which
is determined by the Company's ratio of senior debt to annualized cash flow,
which was 8.3% at March 31, 1996, payable on a monthly basis, or (ii) a one-,
two-, three-, or six-month period LIBOR rate, adjusted by the applicable margin
for LIBOR based loans. The weighted average interest rate of all loans
outstanding at December 31, 1995 and March 31, 1996 was 7.4% and 6.7%,
respectively. The loans are collateralized by the pledge of all stock of the
Company's subsidiaries, a lien on all of the Company's assets and the assignment
of various acquisition, acute care, physician director and other agreements.
The Company has historically expended the majority of its capital resources
to implement its growth strategy and the Company intends to pursue a strategy of
growth through the acquisition and development of dialysis centers. Management
estimates that the development of a new center, depending on its size, requires
approximately $350,000 to $500,000 for construction costs and the purchase of
certain furniture and equipment (leasing certain of the assets can decrease
costs) and approximately $75,000 to $150,000 in working capital. Acquisition of
a dialysis center with an existing patient base typically requires more capital
investment, but each investment varies based on relative size and other factors.
No assurance can be given that the Company will be successful in implementing
its growth strategy or that adequate sources of capital will be available on
terms acceptable to the Company to pursue its growth strategy in the future.
The Company believes that capital resources available to it will be
sufficient to meet the needs of its business, both on a short- and long-term
basis.
Impact of Inflation
A substantial portion of the Company's revenue is subject to reimbursement
rates which are regulated by the federal government and do not automatically
adjust for inflation. These reimbursement rates are adjusted periodically based
on certain factors, including legislation, executive and congressional budget
reduction and control processes, inflation and costs incurred in rendering
services, but in the past have had little relationship to the actual cost of
doing business.
The Company can increase the amounts it bills only for those services
provided by its dialysis business that are not subject to the Medicare
composite rate. Increases in operating costs that are subject to inflation,
such as labor and supply costs, without a compensating increase in
reimbursement rates, may adversely affect the Company's earnings in the future.
<PAGE>
Part II. Other Information
- -------- -----------------
Item 4. Submission of Matters to a Vote of Security Holders.
(a) A Special Meeting of the Company's Stockholders was held on
February 29, 1996.
(b) Not applicable.
(c) 1. The stockholders approved an amendment to the Company's Restated
Certificate of Incorporation increasing the number of authorized
shares of the Company's Common Stock from 20,000,000 to
45,000,000.
For: 8,146,028 Against: 1,099,338 Abstain: 79,398
--------- --------- -------
There were no ( 0 ) broker non-votes in connection with the
---
approval of the amendment to the Company's Restated Certificate
of Incorporation.
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
The following exhibits are filed herewith:
Exhibit No. Document
----------- --------
3.1 Restated Certificate of Incorporation of the Company.
3.1.1 Certificate of Amendment dated February 29, 1996 to
Restated Certificate of Incorporation of the Company.
10.1.4* Amendment No. 3 to the Company's Amended and Restated
1990 Stock Plan dated March 11, 1996 (previously filed
under the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1996).
10.13.2 Second Amendment to Lease dated January 24, 1996
(previously filed under the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1996).
10.20 Agreement and Plan of Merger dated as of January 11,
1996 among Renal Treatment Centers, Inc., Renal
Treatment Centers - Hawaii, Inc. and Intercontinental
Medical Services, Inc. and Dudley S.J. Seto, M.D.
(incorporated herein by reference to Exhibit No. 2.1
filed under the Company's Current Report on Form 8-K
dated February 20, 1996).
10.21 Agreement and Plan of Merger dated as of February 29,
1996 among Renal Treatment Centers, Inc., Renal
Treatment Centers - Oklahoma, Inc. and Western Oklahoma
Kidney Center, L.L.C. and the individuals identified
therein (incorporated herein by reference to Exhibit
No.2.2 filed under the Company's Form S-3 Registration
Statement No. 333-3716).
10.22 Agreement and Plan of Merger dated as of February 29,
1996 among Renal Treatment Centers, Inc., Renal
Treatment Centers - Oklahoma, Inc., RTC Supply, Inc.
and Midwest Dialysis, Inc. and its affiliates
identified therein and the individuals and trusts
identified therein (incorporated herein by reference to
Exhibit No. 2.3 filed under the Company's Form S-3
Registration Statement No. 333-3716).
<PAGE>
Part II. Item 6(a) continued:
10.23 Agreement and Plan of Merger dated as of February 29,
1996 among Renal Treatment Centers, Inc., Renal
Treatment Centers - Oklahoma, Inc. and Midwest Regional
Dialysis, Inc. and its affiliates identified therein
and the individuals and trusts identified therein
(incorporated herein by reference to Exhibit No. 2.4
filed under the Company's Form S-3 Registration
Statement No. 333-3716).
10.24 Agreement and Plan of Merger dated as of February 29,
1996 among Renal Treatment Centers, Inc., Renal
Treatment Centers - Oklahoma, Inc. and Northwest
Dialysis, Inc. and Lorraine T. Wilson, M.D.
(incorporated herein by reference to Exhibit No. 2.5
filed under the Company's Form S-3 Registration
Statement No. 333-3716).
11.1 Computation of Primary and Fully Diluted Earnings per
Share.
27 Financial Data Schedule
--------------
*Management contract or compensatory plan or arrangement
(b) Reports on Form 8-K
Form 8-K dated February 20, 1996 reporting the Agreement and Plan of
Merger with Intercontinental Medical Services, Inc. under Item 2.
<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.
RENAL TREATMENT CENTERS, INC.
Date: June 6, 1996 By: /s/ Frederick C. Jansen
-------------------------------- ----------------------------------
Frederick C. Jansen
Executive Vice President and
Chief Financial Officer
Date: June 6, 1996 By: /s/ Ronald H. Rodgers, Jr.
-------------------------------- ----------------------------------
Ronald H. Rodgers, Jr.
Vice President - Finance and
Chief Accounting Officer
<PAGE>
Renal Treatment Centers, Inc. and Subsidiaries
Exhibit Index
Located at
Exhibit No. Description Page
- ----------- ----------- ----
3.1 Restated Certificate of Incorporation of the Company.
3.1.1 Certificate of Amendment dated February 29, 1996 to Restated
Certificate of Incorporation of the Company.
10.1.4* Amendment No. 3 to the Company's Amended and Restated 1990 Stock
Plan dated March 11, 1996 (previously filed under the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31,
1997).
10.13.2 Second Amendment to Lease dated January 24, 1996 (previously
filed under the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997).
10.20 Agreement and Plan of Merger dated as of January 11, 1996 among
Renal Treatment Centers, Inc., Renal Treatment Centers - Hawaii,
Inc. and Intercontinental Medical Services, Inc. and Dudley S.J.
Seto, M.D. (incorporated herein by reference to Exhibit No. 2.1
filed under the Company's Current Report on Form 8-K dated
February 20, 1996).
10.21 Agreement and Plan of Merger dated as of January 29, 1996 among
Renal Treatment Centers, Inc., Renal Treatment Centers -
Oklahoma, Inc. and Western Oklahoma Kidney Center, L.L.C. and
the individuals identified therein (incorporated herein by
reference to Exhibit No. 2.2 filed under the Company's Form S-3
Registration Statement No. 333-3716).
10.22 Agreement and Plan of Merger dated as of February 29, 1996 among
Renal Treatment Centers, Inc., Renal Treatment Centers -
Oklahoma, Inc., RTC Supply, Inc. and Midwest Dialysis, Inc. and
its affiliates identified therein and the individuals and trusts
identified therein (incorporated herein by reference to Exhibit
No. 2.3 filed under the Company's Form S-3 Registration
Statement No. 333-3716).
10.23 Agreement and Plan of Merger dated as of February 29, 1996 among
Renal Treatment Centers, Inc., Renal Treatment Centers -
Oklahoma, Inc. and Midwest Regional Dialysis, Inc. and its
affiliates identified therein and the individuals and trusts
identified therein (incorporated herein by reference to Exhibit
No. 2.4 filed under the Company's Form S-3 Registration
Statement No. 333-3716).
10.24 Agreement and Plan of Merger dated as of February 29, 1996 among
Renal Treatment Centers, Inc., Renal Treatment Centers -
Oklahoma, Inc. and Northwest Dialysis, Inc. and Lorraine T.
Wilson, M.D. (incorporated herein by reference to Exhibit No.
2.5 filed under the Company's Form S-3 Registration Statement
No. 333-3716).
11.1 Computation of Primary and Fully Diluted Earnings per Share.
27 Financial Data Schedule.
- -----------------------
* Management contract or compensatory plan or arrangement.
<PAGE>
RESTATED
CERTIFICATE OF INCORPORATION
OF
RENAL TREATMENT CENTERS, INC.
Renal Treatment Centers, Inc. (the "Corporation"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware, does hereby certify as follows:
1. The name of the Corporation is Renal Treatment Centers, Inc.
2. The original Certificate of Incorporation of the Corporation was
filed with the Secretary of State of the State of Delaware under the name Renal
Treatment Centers, Inc. on August 11, 1988.
3. This Restated Certificate of Incorporation amends and restates the
Restated Certificate of Incorporation of the Corporation.
4. This Restated Certificate of Incorporation was duly adopted in
accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware. With respect to such adoption,
written consent of the stockholders of the Corporation has been given in
accordance with the provisions of Section 228 of the General Corporation Law of
the State of Delaware and written notice has been given as provided in Section
228.
5. The text of the Certificate of Incorporation of the Corporation is
hereby amended and restated in full to read as follows:
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF
RENAL TREATMENT CENTERS, INC.
FIRST: The name of the Corporation is RENAL TREATMENT CENTERS, INC.
SECOND: The address of the Corporation's registered office in the State of
Delaware is 32 Loockerman Square, Suite L-100, City of Dover, County of Kent.
The name of its registered agent at such address is The Prentice-Hall
Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is 25,000,000 shares, consisting
of 20,000,000 shares of Common Stock (the "Common Stock"), $.01 par value; and
5,000,000 shares of Series Preferred Stock (the "Series Preferred Stock"), $.01
par value. The designations, rights, including voting rights, preferences,
qualifications, limitations and restrictions of the Series Preferred Stock, and
particularly of the shares of each series thereof, may, to the extent permitted
by law, be similar to or may differ from those of any other series. The Board
of Directors of the Corporation is hereby expressly granted authority to issue
from time to time Series Preferred Stock in one or more series and to fix from
time to time before issuance thereof, by filing a certificate pursuant to the
General Corporation Law of the State of Delaware, the number of shares in each
series and all designations, relative rights (including the right to vote and,
to the extent permitted by law, to convert into shares of any class or into any
series of any class), preferences, qualifications, limitations and restrictions
of the shares in each such series.
FIFTH: In furtherance and not in limitation of the powers conferred by law, the
Board of Directors is authorized to make,
- 2 -
<PAGE>
alter or repeal the By-Laws of the Corporation. Election of directors need not
be by written ballot.
SIXTH: Whenever a compromise or arrangement is proposed between the Corporation
and its creditors or any class of them and/or between the Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of the
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for the Corporation under the provisions of
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for the Corporation under
the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting
of the creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing three-
fourths (3/4) in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of the
Corporation as a consequence of such compromise or arrangement, such compromise
or arrangement and such reorganization shall, if sanctioned by the court to
which the application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders of the
Corporation, as the case may be, and also on the Corporation.
SEVENTH: The personal liability of the directors of the Corporation is hereby
eliminated to the fullest extent permitted by paragraph (7) of subsection (b) of
Section 102 of the General Corporation Law of the State of Delaware, as the same
may be amended and supplemented.
EIGHTH: Each person who is or was or had agreed to become a director or officer
of the Corporation (and the heirs, executors, administrators or estate of such
person) shall be indemnified by the Corporation to the fullest extent permitted
by the General Corporation Law of the State of Delaware as presently or
hereafter in effect. Without limiting the generality or effect of the
foregoing, the Corporation may enter into one or more agreements with any person
which provide for indemnification greater or
- 3 -
<PAGE>
different than that provided in this Article. No amendment to or repeal of this
Article EIGHTH shall apply to or have any effect on the right to indemnity
permitted or authorized hereunder for or with respect to claims asserted before
or after such amendment or repeal arising from acts or omissions occurring in
whole or in part before the effective date of such amendment or repeal.
NINTH: Any provisions contained in this Restated Certificate of Incorporation
may be amended, altered, changed or repealed, in the manner now or hereafter
prescribed by statute, and all rights conferred upon stockholders herein are
granted subject to this reservation.
IN WITNESS WHEREOF Renal Treatment Centers, Inc. has caused this
certificate to be signed and attested by its duly authorized officers this 12th
day of August, 1993.
RENAL TREATMENT CENTERS, INC.
By:/s/ Robert L. Mayer, Jr.
------------------------
President
Attest:
By:/s/ Frederick C. Jansen
-----------------------
Secretary
- 4 -
<PAGE>
CERTIFICATE OF AMENDMENT OF
RESTATED CERTIFICATE OF INCORPORATION
OF RENAL TREATMENT CENTERS, INC.
--------------------------------
Renal Treatment Centers, Inc., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, does
hereby certify as follows:
1. The Board of Directors of Renal Treatment Centers, Inc. (the
"Corporation"), at a meeting of the directors held on December 13, 1995, duly
adopted a resolution setting forth a proposed amendment of the Restated
Certificate of Incorporation of the Corporation, declaring said amendment to be
advisable and calling a special meeting of the stockholders of the Corporation
for consideration thereof by the stockholders of the Corporation. The proposed
amendment is set forth on Exhibit A attached hereto.
2. Thereafter, on February 29, 1996, at the special meeting of the
stockholders of the Corporation called and held upon notice duly given, the
holders of a majority of the outstanding shares of Common Stock, $.01 par value,
of the Corporation voted in favor of the amendment.
3. Such amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, Renal Treatment Centers, Inc. has caused this
Certificate of Amendment to be signed and attested by its duly authorized
officers, this 29th day of February, 1996.
RENAL TREATMENT CENTERS, INC.
ATTEST:
/s/ Frederick C. Jansen By:/s/ Robert L. Mayer, Jr.
- ----------------------- ------------------------
Frederick C. Jansen, Robert L. Mayer, Jr.,
Secretary President
<PAGE>
EXHIBIT A
---------
Article FOURTH of the Restated Certificate of Incorporation of Renal
Treatment Centers, Inc. is hereby amended so as to be restated in full as
follows:
"FOURTH: The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is 50,000,000 shares,
consisting of 45,000,000 shares of Common Stock (the "Common Stock"), $.01
par value; and 5,000,000 shares of Series Preferred Stock (the "Series
Preferred Stock"), $.01 par value. The designations, rights, including
voting rights, preferences, qualifications, limitations and restrictions of
the Series Preferred Stock, and particularly of the shares of each series
thereof, may, to the extent permitted by law, be similar to or may differ
from those of any other series. The Board of Directors of the Corporation
is hereby expressly granted authority to issue from time to time Series
Preferred Stock in one or more series and to fix from time to time before
issuance thereof, by filing a certificate pursuant to the General
Corporation Law of the State of Delaware, the number of shares in each
series and all designations, relative rights (including the right to vote
and, to the extent permitted by law, to convert into shares of any class or
into any series of any class), preferences, qualifications, limitations and
restrictions of the shares in each such series."
<PAGE>
Exhibit 11.1(a)
Renal Treatment Centers, Inc. and Subsidiaries
COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
for the quarter ended March 31, 1996
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1996
Primary Fully Diluted
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Net income $3,158,054 $3,158,054
Add back interest on note, tax effected -- 67,665
- ----------------------------------------------------------------------------------------
Net income available to common stockholders $3,158,054 $3,225,719
========================================================================================
Weighted average number of shares outstanding 23,554,165 23,554,165
Weighted average number of maximum shares subject
to exercise under outstanding stock options 1,349,743 1,349,743
Weighted average shares assumed issued upon conversion
of note -- 661,501
- ----------------------------------------------------------------------------------------
24,903,908 25,565,409
Less treasury shares assumed purchased with proceeds
from assumed exercise of outstanding common stock
options 625,473 583,641
- ----------------------------------------------------------------------------------------
Weighted average number of common and common stock 24,278,435 24,981,768
equivalents outstanding
========================================================================================
Net income per common and common stock equivalent $0.13 $0.13
========================================================================================
</TABLE>
<PAGE>
Exhibit 11.1
Renal Treatment Centers, Inc. and Subsidiaries
COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
for the quarter ended March 31, 1995
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1995
Primary Fully Diluted
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Net income $2,033,169 $2,033,169
Add back interest on note, tax effected -- 74,357
- ----------------------------------------------------------------------------------------
Net income available to common stockholders $2,033,169 $2,107,526
========================================================================================
Weighted average number of shares outstanding 21,098,552 21,098,552
Weighted average number of maximum share subject
to exercise under outstanding stock options 1,168,198 1,168,198
Weighted average shares assumed issued upon conversion
of note -- 712,024
- ----------------------------------------------------------------------------------------
22,266,750 22,978,774
Less treasury shares assumed purchased with proceeds
from assumed exercise of outstanding common stock
options 735,150 651,854
- ----------------------------------------------------------------------------------------
Weighted average number of common and common stock 21,531,600 22,326,920
equivalents outstanding
========================================================================================
Net income per common and common stock equivalent $0.09 $0.09
========================================================================================
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 2,657,638
<SECURITIES> 0
<RECEIVABLES> 59,590,971
<ALLOWANCES> 3,500,000
<INVENTORY> 3,522,878
<CURRENT-ASSETS> 64,707,071
<PP&E> 39,206,150
<DEPRECIATION> 14,253,577
<TOTAL-ASSETS> 177,464,455
<CURRENT-LIABILITIES> 20,995,092
<BONDS> 0
0
0
<COMMON> 236,191
<OTHER-SE> 115,729,832
<TOTAL-LIABILITY-AND-EQUITY> 177,464,455
<SALES> 0
<TOTAL-REVENUES> 49,204,164
<CGS> 0
<TOTAL-COSTS> 23,706,233
<OTHER-EXPENSES> 1,708,247
<LOSS-PROVISION> 1,535,944
<INTEREST-EXPENSE> 665,808
<INCOME-PRETAX> 3,158,054
<INCOME-TAX> 1,990,207
<INCOME-CONTINUING> 3,158,054
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,158,054
<EPS-PRIMARY> .13
<EPS-DILUTED> .13
</TABLE>
