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PROSPECTUS
30,000 Shares
RENAL TREATMENT CENTERS, INC.
Common Stock
($.01 par value)
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This Prospectus relates to 30,000 shares (the "Shares") of Common Stock,
$.01 par value, of Renal Treatment Centers, Inc. (the "Company") that may be
acquired by certain securityholders of the Company (the "Selling Stockholders")
in private transactions upon exercise of options to purchase the Shares. See
"Selling Stockholders." Some or all of the shares of Common Stock to which this
Prospectus relates may be sold from time to time by the Selling Stockholders, or
by pledges, donees, transferees or other successors in interest to the Selling
Stockholders, at public or private sale at prevailing market prices, prices
related to prevailing market prices, negotiated prices or fixed prices (and, in
the case of sales through brokers, upon payment of normal brokerage
commissions). The Company will not receive any of the proceeds from the sale of
the shares of Common Stock offered hereunder by the Selling Stockholders.
The Common Stock of the Company is quoted on the New York Stock Exchange
under the symbol "RXT." The last reported sale price of the Common Stock on the
New York Stock Exchange on February 13, 1997 was $29.375 per share.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMIS SION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
See "Risk Factors" beginning on page 2 for a discussion of certain factors
that should be considered by prospective purchasers of the securities offered
hereby.
This Prospectus does not constitute an offer to sell securities in any
jurisdiction to any person to whom it is unlawful to make such offer in such
jurisdiction.
No person has been authorized by the Company to give any information or to
make any representations, other than as contained in this Prospectus, and, if
given or made, such information or representations must not be relied upon.
Neither delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof.
Unless the context otherwise requires, the term "Company" refers to Renal
Treatment Centers, Inc. and its subsidiaries.
The date of this Prospectus is February 14, 1997
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AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the offices of
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as at the following regional offices of the
Commission: Seven World Trade Center, Suite 1300, New York, New York 10048; and
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition,
the Commission maintains a Web site that contains such materials at
http://www.sec.gov. The Company's Common Stock is listed on the New York Stock
Exchange, 20 Broad Street, New York, New York 10005, and such reports, proxy
statements and other information concerning the Company can be inspected at such
Exchange.
The Company has filed with the Commission a Registration Statement (which
term shall include all amendments, exhibits and schedules thereto) on Form S-3
under the Securities Act of 1933 (the "Securities Act") with respect to the
Shares offered hereby. This Prospectus does not contain all the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, and to which
reference is hereby made. Statements made in this Prospectus as to the contents
of any document referred to are not necessarily complete. With respect to each
such document filed as an exhibit to the Registration Statement, reference is
made to the exhibit for a more complete description of the matter involved, and
each such statement shall be deemed qualified in its entirety by such reference.
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RISK FACTORS
This Prospectus contains certain forward-looking statements within the
meaning of the Securities Act. Actual results could differ materially from
those projected in the forward-looking statements as a result of certain of the
risk factors set forth below and certain other factors set forth elsewhere in
this Prospectus. In addition to the other information contained and
incorporated by reference in this Prospectus, the following risk factors should
be considered carefully in evaluating the Company and its business before
purchasing the Shares offered hereby.
Dependence on Medicare, Medicaid and Other Sources of Reimbursement
The Company is reimbursed for dialysis services primarily at fixed rates as
established in advance under the Medicare End Stage Renal Disease ("ESRD")
program. Under this program, once a patient becomes eligible for Medicare
reimbursement, Medicare is responsible for payment of approximately 80% of the
composite rate for dialysis treatment. The composite rate is determined by the
Health Care Financing Administration ("HCFA") for reimbursement of Medicare
patients. Approximately 65% and 58% of the Company's net patient revenue during
the year ended December 31, 1995 and the nine months ended September 30, 1996,
respectively, was funded by Medicare. Since 1983, numerous Congressional
actions have resulted in changes in the Medicare composite reimbursement rate
from a national average of $138 per treatment in 1983 to a low of $125 per
treatment on average in 1986 and to approximately $126 per treatment on average
at present. The Company is not able to predict whether future rate changes will
be made. Reductions in composite rates could have a material adverse effect on
the Company's revenues and net earnings. Furthermore, increases in operating
costs that are subject to inflation, such as labor and supply costs, without a
compensating increase in prescribed rates, may adversely affect the Company's
earnings in the future. The Company is also unable to predict whether certain
services, as to which the Company is currently separately reimbursed, may in the
future be included in the Medicare composite rate.
Since June 1, 1989, the Medicare ESRD program has provided reimbursement
for the administration to dialysis patients of erythropoietin ("EPO"), a drug
that is beneficial in the treatment of anemia, a complication experienced by
most dialysis patients. Most of the Company's dialysis patients receive EPO.
Revenues associated with the administration of EPO are significant to the
Company and the Company cannot predict future changes in the reimbursement
rate, the typical dosage per administration or the cost of EPO. EPO is produced
by only one manufacturer, and any interruption of supply could adversely affect
the Company's operations.
All of the states in which the Company currently operates dialysis centers
provide Medicaid (or comparable) benefits to qualified recipients to supplement
their Medicare entitlement. The Company estimates that approximately 4% of its
net patient revenue during the fiscal year ended December 31, 1995 and during
the nine months ended September 30, 1996 was funded by Medicaid or comparable
state programs. The Medicaid programs are subject to statutory and regulatory
changes, administrative rulings, interpretations of policy and
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governmental funding restrictions, all of which may have the effect of
decreasing program payments, increasing costs or modifying the way the Company
operates its dialysis business.
Approximately 31% and 38% of the Company's net patient revenue during the
fiscal year ended December 31, 1995 and during the nine months ended September
30, 1996, respectively, was from sources other than Medicare and Medicaid.
These sources include payments from third-party, non-government payers and
payments from hospitals with which the Company has agreements for the provision
of inpatient acute dialysis treatments, in each case at rates that generally
exceed the Medicare and Medicaid rates. Any restriction or reduction of the
Company's ability to charge for such services at rates in excess of those paid
by Medicare would adversely affect the Company's net patient revenue and net
income. The Company is unable to quantify or predict the degree, if any, of the
risk of reductions in payments under these various payment plans.
In October 1996, HCFA announced that four managed care companies had been
awarded contracts to develop and implement capitated reimbursement systems for
ESRD patients in their respective markets as part of a four-year demonstration
project. The demonstration project is intended to assist HCFA in determining
whether to allow open enrollment of ESRD patients into managed care plans
serving Medicare beneficiaries. Currently, managed care companies are permitted
to arrange for the provision of dialysis services only to existing members in
their programs who develop ESRD. The Company is unable to predict whether the
demonstration project will result in large numbers of ESRD patients enrolling in
managed care programs, or the impact of the enrollment of ESRD patients in
managed care programs on the Company. The widespread introduction of managed
care to dialysis services could result in a reduction in the rates of
reimbursement for the Company's services, which could have a material adverse
effect on the Company's revenues and net earnings.
Operations Subject to, and Potential Effects of, Governmental Regulation
The Company is subject to extensive regulation by both the Federal
government and the states in which it conducts its business, including the
illegal remuneration provisions of the Social Security Act and similar state
laws, which impose civil and criminal sanctions on persons who solicit, offer,
receive or pay any remuneration, directly or indirectly, in consideration for
referring a patient for treatment that is paid for in whole or in part by
Medicare, Medicaid or similar state programs. The Federal government has
published regulations that provide exceptions or safe harbors for certain
business transactions. Transactions that are structured within the safe harbors
are deemed not to violate the illegal remuneration provisions. Transactions
that do not satisfy all elements of a relevant safe harbor do not necessarily
violate the illegal remuneration statute, but may be subject to greater scrutiny
by enforcement agencies. The arrangements between the Company and the physician
directors of its dialysis centers ("Physician Directors") have been structured
to satisfy the elements of the applicable safe harbors, but there can be no
assurance that they will not be found to violate the illegal remuneration
provisions. In addition, certain of the Company's Physician Directors from whom
the Company has acquired dialysis centers have received shares of the Company's
Common Stock in full or partial consideration for such acquisitions, and other
Physician Directors may
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have purchased shares of the Company's Common Stock in the open market. The
Company believes that such security ownership falls within one of the safe
harbors, but there can be no assurance that such security ownership will not be
found to violate the illegal remuneration provisions. Although the Company has
never been challenged under these statutes and believes it complies in all
material respects with these and all other applicable laws and regulations,
there can be no assurance that the Company will not be required to change its
practices or relationships with its Physician Directors or that the Company will
not experience material adverse effects as a result of any such challenge.
The Omnibus Budget Reconciliation Act of 1989 includes certain provisions
("Stark I") that restrict physician referrals for clinical laboratory services
to entities with which a physician or an immediate family member has a financial
relationship. In August 1995, HCFA published regulations interpreting Stark I.
The regulations specifically provide that services furnished in an ESRD facility
that are included in the composite billing rate are excluded from the coverage
of Stark I. The Company believes that the language and legislative history of
Stark I indicate that Congress did not intend to include laboratory services
provided incidental to dialysis services within the Stark I prohibition;
however, laboratory services not included in the Medicare compos ite rate could
be included within the coverage of Stark I. Violations of Stark I are
punishable by civil penalties, which may include exclusion or suspension of a
provider from future participation in Medicare and Medicaid programs and
substantial fines. Due to the breadth of the statutory provisions and the
absence of regulations or court decisions addressing laboratory services not
included in the Medicare composite rate, it is possible that the Company's
practices might be challenged under this law.
The Omnibus Budget Reconciliation Act of 1993 includes certain provisions
("Stark II") that restrict physician referrals for certain designated health
services to entities with which a physician or an immediate family member has a
financial relationship. The Company believes that the language and legislative
history of Stark II indicate that Congress did not intend to include dialysis
services and the services and items provided incident to dialysis services
within the Stark II prohibitions; however, certain services, including the
provision of, or arrangement and assumption of financial responsibility for,
outpatient prescription drugs, including EPO, and clinical laboratory services,
could be construed as designated health services within the meaning of Stark II.
Violations of Stark II are punishable by civil penalties, which may include
exclusion or suspension of the provider from future participation in Medicare
and Medicaid programs and substantial fines. Due to the breadth of the
statutory provisions and the absence of regulations or court decisions
addressing the specific arrangements by which the Company conducts its business,
it is possible that the Company's practices might be challenged under these
laws.
The Clinton administration's health care reform proposals, and other health
care reform proposals in general, have not addressed the Medicare ESRD program.
Nevertheless, health care reform in general, and Medicare reform in particular,
could bring radical change in the financing and regulation of the health care
business, and the Company is unable to predict the effect of such changes on its
future operations. Changes in reimbursement levels under Medicare or Medicaid
and changes in applicable governmental regulations could significantly affect
the Company's results of operations. It is uncertain at this time what
legislation on health care reform, if any, will ultimately be implemented or
whether other changes in the
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administration or interpretation of governmental health care programs will
occur. There can be no assurance that future health care legislation or other
changes in the administration or interpretation of governmental health care
programs will not have a material adverse effect on the results of operations of
the Company.
Risks Inherent in Growth Strategy
The Company's business strategy depends in significant part on its ability
to acquire or develop additional dialysis centers. This strategy is dependent
on the continued availability of suitable acquisition candidates at acceptable
prices and subjects the Company to the risks inherent in assessing the value,
strengths and weaknesses of acquisition candidates, integrating and managing the
operations of acquired companies and identifying suitable locations for
additional facilities. The Company's growth is expected to place significant
demands on the Company's financial resources. The Company plans to borrow a
significant portion of the funds needed to acquire or develop centers in the
future. Although the Company's credit facility with a consortium of bank
lenders includes up to $100,000,000 for acquisition and development activities
and general working capital requirements, and the Company completed an offering
of $125,000,000 principal amount of 5 5/8% Convertible Subordinated Notes due
2006 on June 12, 1996, a portion of the proceeds of which will be used to fund
future acquisitions, additional equity or debt financings are expected to be
required in order for the Company to fund its expansion plans. There can be no
assurance that the Company will continue to be able to obtain necessary
financing on acceptable terms for the acquisition or development of centers or
that the Company will otherwise be successful in acquiring or developing new
centers. No assurance can be given that the Company will make any additional
acquisitions or develop any additional centers. See also "Risk Factors --
Competition."
Dependence on Physician Referrals
The Company's centers are dependent upon referrals of ESRD patients for
treatment by physicians specializing in nephrology and practicing in the
communities served by the Company's dialysis centers. As is customary in the
dialysis industry, at each center one or a few physicians account for all or a
significant portion of the patient referral base. The loss of one or more key
referring physicians at a particular center could have a material adverse impact
on the operations of that center and could adversely affect the Company's
overall operations. Financial relationships with physicians and other referral
sources are highly regulated. The illegal remuneration provisions of the Social
Security Act and similar state laws prohibit contracts for referrals.
Competition
The dialysis industry is fragmented and highly competitive, particularly
from the standpoint of competition for acquisition of existing dialysis centers
and developing relationships with referring physicians. Competition for
qualified physicians to act as Physician Directors is also high. Also, a number
of health care providers have entered or may decide to enter the dialysis
business. Certain of the Company's competitors have substantially greater
financial resources than the Company and may compete with the Company for
acquisitions and for development of
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centers in markets targeted by the Company. There can be no assurance that the
Company can continue to compete effectively with such providers. In addition,
competition has increased the cost of acquiring existing dialysis facilities and
there can be no assurance that these costs will not continue to increase as a
result of future industry consolidation. Furthermore, some of the Company's
centers are in urban areas where there are many competing facilities in close
proximity. The Company has also experienced competition from the establishment
of facilities by former Physician Directors and referring physicians.
Dependence on Key Personnel
The Company is dependent on certain key management personnel, particularly
its President and Chief Executive Officer, Robert L. Mayer, Jr., the loss of
whom could have an adverse effect on the Company's business. Moreover, the
Company believes that its future success will be significantly dependent on its
ability to attract and retain qualified physicians to serve as Physician
Directors of its dialysis centers. In addition, the Company will need to
continue to attract and retain highly skilled nurses, competition for whom is
intense.
Volatility of Market Price of Common Stock
The trading price of the Common Stock is subject to significant
fluctuations in response to variations in quarterly operating results, general
conditions in the health care industry, changes in the regulatory environment
and other factors.
Shares Eligible for Future Sale
Of the 24,393,056 outstanding shares of Common Stock as of December 12,
1996, 21,870,300 shares were freely tradeable and 2,522,756 shares were
restricted and therefore not freely tradeable. Of the restricted shares,
2,453,165 shares had been registered under the Securities Act on shelf
registration statements and were eligible for sale in the public market as of
December 12, 1996. The remaining 69,591 restricted shares are eligible for sale
in the public market pursuant to Rule 144 promulgated under the Securities Act,
and 1,598,199 shares subject to exercise of outstanding options as of December
12, 1996 will become eligible for future sale in the public market as they are
exercised. Sales of a substantial number of shares of Common Stock in the
public market during or following the offering made hereby could adversely
affect prevailing market prices of the Common Stock.
Potential Anti-Takeover Effects of Delaware Law and By-law Provisions; Possible
Issuances of Preferred Stock
Certain provisions of Delaware law and the Company's By-Laws could delay or
impede the removal of incumbent directors and could make it more difficult for a
third party to acquire, or could discourage a third party from attempting to
acquire, control of the Company. Such provisions could limit the price that
certain investors might be willing to pay in the future for shares of the
Company's Common Stock. The Company's Board of Directors is divided into three
classes, with directors in each class elected for three-year terms. The By-Laws
impose various procedural and other requirements that could make it more
difficult for stockholders to
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effect certain corporate actions. Shares of preferred stock may be issued by the
Board of Directors without stockholder approval on such terms and conditions,
and having such rights, privileges and preferences, as the Board may determine.
The rights of the holders of Common Stock will be subject to, and may be
adversely affected by, the rights of the holders of any preferred stock that may
be issued in the future. The Company has no current plans to issue any shares of
preferred stock.
THE COMPANY
The Company 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 currently operates 114 outpatient dialysis centers in 23
states and the District of Columbia and two dialysis centers in the Republic of
Argentina. As of January 20, 1997, the Company provided dialysis services to
approximately 8,300 patients. The Company also provided ancillary medications
and services to patients, the most significant of which is the administration of
EPO, a protein used to treat anemia, a complication experienced by most dialysis
patients. In addition, the Company provided inpatient acute dialysis services
to 92 hospitals located in its service areas as of January 20, 1997. The Company
has expanded rapidly, primarily through acquisitions, increasing the number of
dialysis centers in its network from 15 as of December 31, 1991 to its current
level of 116 centers.
The Company is a Delaware corporation formed on August 11, 1988. Its
principal executive offices are located at 1180 West Swedesford Road, Building
2, Suite 300, Berwyn, Pennsylvania 19312, and its telephone number is (610) 644-
4796.
SELLING STOCKHOLDERS
The Shares covered by this Prospectus are, or may be, offered by the
Selling Stockholders. The Selling Stockholders are Richard W. Johns, Liliana
Barone and Miguel Curi.
The Selling Stockholders were granted options to purchase an aggregate of
30,000 shares of the Company's Common Stock as partial consideration for
entering into a Purchase and Settlement Agreement dated December 16, 1996 (the
"Settlement Agreement") among the Selling Stockholders, RTC Holdings, Inc., a
subsidiary of the Company, and JBC S.A., an Argentine corporation affiliated
with the Selling Stockholders. The Settlement Agreement, among other things,
released RTC Holdings, Inc. from the obligation to issue shares of stock in RTC
Holdings S.A., a subsidiary of RTC Holdings, Inc., to JBC S.A. in consideration
of JBC S.A.'s assistance in increasing the number of patients at the Company's
dialysis centers in the Republic of Argentina.
Under the terms of the options, each Selling Stockholder has the right to
purchase 10,000 shares of the Company's Common Stock at a price of $23.50 per
share. Each option remains exercisable until the earlier of December 16, 2006
or the expiration of one year from the date of the Selling Stockholder's death.
The options were fully exercisable on the date of grant, December 16, 1996, with
the exception of the option granted to Miguel Curi, which becomes
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exercisable upon the earlier of (i) the date on which the number of patients at
the Company's dialysis centers in the Republic of Argentina exceeds 1,000 or
(ii) January 1, 1998.
Except for Miguel Curi, none of the Selling Stockholders, nor any affiliate
of any of the Selling Stockholders, is now, or ever has been, an officer,
director or employee of the Company. Miguel Curi is employed by the Company as
project manager for its Argentine operations. In connection with the Settlement
Agreement, the Selling Stockholders also entered into a covenant not to compete
with the Company that, for a period of ten years, beginning in December 1996,
restricts each of the Selling Stockholders from soliciting clients, employees or
contractors of the Company's dialysis centers in the Republic of Argentina, from
disclosing information relating to the operations of the Company's dialysis
centers in the Republic of Argentina, and from any involvement in the provision
of dialysis services in the Republic of Argentina.
Pursuant to the Settlement Agreement, the Company granted the Selling
Stockholders certain registration rights with respect to the Shares purchasable
upon exercise of the options. The Company has agreed to register the shares on a
Form S-3 registration statement in a manner that will constitute a "shelf"
registration for purposes of Rule 415 under the Securities Act. The Registration
Statement is being filed by the Company in order to register the Shares and
fulfill the foregoing obligation of the Company.
Additional information as to the Selling Stockholders and their beneficial
ownership of the Company's Common Stock is set forth below. In accordance with
Rule 13d-3 under the Exchange Act, the Selling Stockholders are deemed to
beneficially own the Shares, because they have the right to acquire the Shares
within 60 days. Therefore, the Shares, although not yet purchased by the
Selling Stockholders, are included in the table below. Each Selling Stockholder
has sole investment and voting power with respect to the shares listed below.
<TABLE>
<CAPTION>
Common Stock To
Be Beneficially
Common Stock Owned If All Shares
Beneficially Owned Shares That That May Be Offered
On February 1, 1997 May Be Offered Hereunder Are Sold
Name -------------------- Hereunder --------------------
- ---- Shares Percent --------------- Shares Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Richard W. Johns 10,000 * 10,000 --- ---
- -------------------------------------------------------------------------------
Liliana Barone 10,000 * 10,000 --- ---
- -------------------------------------------------------------------------------
Miguel Curi 10,000 * 10,000 --- ---
- -------------------------------------------------------------------------------
</TABLE>
- ----------
* Less than 1%.
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Pledgees, donees or transferees of or other successors in interest to the
Selling Stockholders will be identified in a supplement to this Prospectus. If
the number of shares of Common Stock transferred is material, the new holders of
the shares transferred will also be identified in a post-effective amendment to
the Registration Statement.
PLAN OF DISTRIBUTION
The Company has been advised that the distribution of the Shares by the
Selling Stockholders, or by pledgees, donees or transferees of or other
successors in interest to the Selling Stockholders, may be effected from time to
time in one or more transactions (which may involve block transactions) on the
New York Stock Exchange or such other exchange or market in which the Common
Stock may from time to time be trading, in negotiated transactions or in a
combination of any such transactions. Such transactions may be effected by the
Selling Stockholders at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at negotiated prices or at fixed
prices. The Selling Stockholders may effect such transactions by selling Shares
to or through broker-dealers, including purchases by a broker-dealer as
principal and resale by such broker-dealer for its account pursuant to this
Prospectus. Such broker-dealers will receive compensation in the form of
discounts or commissions from the Selling Stockholders and may receive
commissions from the purchasers of Shares for whom such broker-dealers may act
as agents (which discounts or commissions from the Selling Stockholders or such
purchasers, if in excess of those customary for the types of transactions
involved, will be disclosed in a supplemental prospectus).
Any broker-dealer that participates with the Selling Stockholders in the
distribution of Common Stock may be deemed to be an "underwriter" within the
meaning of the Securities Act of 1933, and any commissions or discounts received
by such broker-dealer and any profit on the resale of Shares by such broker-
dealer may be deemed to be underwriting discounts and commissions under the
Securities Act of 1933.
The respective costs and expenses of the registration of the Shares, except
for underwriting or selling discounts or commissions, will be paid by the
Company. These costs and expenses borne by the Company will include, without
limitation, all registration and filing fees, legal and accounting fees,
printing expenses and costs of special audits incident to or required by the
registration of the Shares.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the resale of the
Shares offered hereunder by the Selling Stockholders.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission and are
incorporated by reference in this Prospectus:
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(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995;
(b) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1996, and Amendment No. 1 thereto on Form 10-Q/A filed June 6,
1996;
(c) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1996;
(d) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1996;
(e) The Company's Current Report on Form 8-K dated February 20, 1996;
(f) The Company's Current Report on Form 8-K dated May 28, 1996;
(g) The Company's Current Report on Form 8-K dated May 29, 1996, and
Amendment No. 1 thereto on Form 8-K/A filed July 16, 1996;
(h) The Company's Current Report on Form 8-K dated August 23, 1996;
(i) The Company's Current Report on Form 8-K dated September 16, 1996;
(j) The Company's Current Report on Form 8-K dated September 16, 1996 and
Amendment No. 1 thereto on Form 8-K/A filed November 27, 1996;
(k) The Company's Current Report on Form 8-K dated February 5, 1997; and
(l) The description of the Company's Common Stock set forth in the
Company's Registration Statement No. 33-74994 on Form S-1, initially filed with
the Commission under the Securities Act on February 4, 1994, under the caption
"Description of Capital Stock -- Common Stock," which is incorporated by
reference in response to Item 1 of Registration Statement No. 1-14142 on Form 8-
A filed by the Company with the Commission on December 14, 1995 pursuant to
Section 12(b) of the Exchange Act.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Prospectus and
to be a part hereof from the date of filing of such documents. Any statement
incorporated herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement and any statement
contained herein shall be deemed to be modified or superseded for all purposes
to the extent that a statement contained in any subsequently filed document
which is deemed to be incorporated by reference modifies or supersedes such
statement.
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The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the request of such person, a copy of any or all
of the documents incorporated herein by reference, other than exhibits to such
documents (unless such exhibits are specifically incorporated by reference
herein). Such requests should be addressed to: Ronald H. Rodgers, Jr., Vice
President of Finance, Renal Treatment Centers, Inc., 1180 West Swedesford Road,
Building 2, Suite 300, Berwyn, Pennsylvania 19312 (telephone: 610-644-4796).
LEGAL MATTERS
The validity of the issuance of the Shares offered hereby has been passed
upon for the Company by Duane, Morris & Heckscher, Philadelphia, Pennsylvania.
Thomas J. Karl, a partner of Duane, Morris & Heckscher, has served as the Vice
President, Secretary and General Counsel of the Company since May 27, 1996, and
is the beneficial owner of 1,540 shares of the Company's Common Stock. Mr. Karl
also holds options to purchase 120,000 shares of Common Stock.
EXPERTS
The consolidated balance sheets, supplemental consolidated balance sheets
and restated consolidated balance sheets of the Company and its subsidiaries as
of December 31, 1995 and 1994 and the related consolidated statements of income,
stockholders' equity and cash flows, supplemental consolidated statements of
income, stockholders' equity and cash flows and restated consolidated statements
of income, stockholders' equity and cash flows for each of the three years in
the period ended December 31, 1995 incorporated by reference in this Prospectus
have been incorporated by reference herein in reliance on the reports, which
include references to information audited by other auditors, of Coopers &
Lybrand L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing, which reports are also incorporated by
reference herein.
The Company acquired Wichita Dialysis Group and Healthcare Corporation and
Affiliates in business combinations which have both been accounted for using the
pooling-of-interests method of accounting. The financial statements of Wichita
Dialysis Group and Healthcare Corporation and Affiliates as of December 31, 1993
and 1994 and for the years then ended were audited by Baird, Kurtz & Dobson and
Deloitte & Touche LLP, respectively, as stated in their reports incorporated by
reference herein, and have been so incorporated in reliance upon the reports of
such firms given upon their authority as experts in accounting and auditing.
Baird, Kurtz & Dobson and Deloitte & Touche LLP are independent auditors. The
reports of Coopers & Lybrand L.L.P., insofar as they relate to the amounts
included for Wichita Dialysis Group and Healthcare Corporation and Affiliates,
are based solely on the reports of Baird, Kurtz & Dobson and Deloitte & Touche
LLP, respectively.
The Company acquired KCDC/KCCC Group in a business combination that has
been accounted for using the purchase method of accounting. The combined
balance sheet of KCDC/KCCC Group as of December 31, 1995 and the related
combined statements of income, stockholders' equity and cash flows for the year
then ended incorporated by reference in this Prospectus have been incorporated
by reference herein in reliance on the report of Coopers &
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Lybrand L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing, which report is also incorporated by
reference herein.
The Company acquired PCAKC/NFAKC Group in a business combination that has
been accounted for using the pooling-of-interests method of accounting. The
combined balance sheet of PCAKC/NFAKC Group as of December 31, 1995 and the
related combined statements of operations, stockholders' equity and cash flows
for the year then ended incorporated by reference in this Prospectus have been
incorporated by reference herein in reliance on the report of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as experts
in accounting and auditing, which report is also incorporated by reference
herein.
The Company acquired Columbus Regional Dialysis Center, Inc. ("CRDC") and
Phenix City Nephrology Referral Center, Inc. ("PCNRC") in a business combination
that has been accounted for using the purchase method of accounting. The
balance sheet of CRDC as of December 31, 1995 and the related statements of
retained earnings, income and cash flows for the year then ended and balance
sheet of PCNRC as of December 31, 1995 and the related statements of retained
earnings, income and cash flows for the year then ended incorporated by
reference in this Prospectus have been incorporated by reference herein in
reliance on the reports of Aronhalt, Stringer and Company, independent
accountants, given on the authority of that firm as experts in accounting and
auditing, which reports are also incorporated by reference herein.
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