As filed with the Securities and Exchange Commission on November 18, 1996
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
HCIA INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S><C>
MARYLAND 7389 52-1407998
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
300 EAST LOMBARD STREET
BALTIMORE, MARYLAND 21202
(410) 895-7470
(address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
-------------------
CHARLES A. BERARDESCO, ESQUIRE
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
HCIA INC.
300 EAST LOMBARD STREET
BALTIMORE, MARYLAND 21202
(410) 895-7470
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES OF ALL COMMUNICATIONS TO:
FRANK S. JONES, JR., ESQUIRE
D. SCOTT FREED, ESQUIRE
WHITEFORD, TAYLOR & PRESTON L.L.P.
SEVEN SAINT PAUL STREET
BALTIMORE, MARYLAND 21202
(410) 347-8707
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [x]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Amount To Be Offering Price Per Aggregate Offering Registration
Securities To Be Registered Registered(1) Share(1) Price(1) Fee(1)
<S><C>
Common Stock, $.01 par value 276,265(2) $27.625 $7,631,821 $2,313
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act of 1933, as amended, and based on
the average of the high and low sales price per share of HCIA Inc. Common
Stock on the Nasdaq National Market on November 12, 1996.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED ___________, 1996
PROSPECTUS
276,265 Shares
[HCIA Logo]
Common Stock
The shares of common stock, par value $.01 per share (the "Common
Stock"), of HCIA Inc. ("HCIA" or the "Company") which may be offered hereby are
being sold by certain stockholders of the Company (the "Selling Stockholders")
who received such shares in connection with the Company's acquisition of LBA
Health Care Management, Inc. ("LBA"). See "Selling Stockholders." The Company
will not receive any of the proceeds from the sale of the shares of Common Stock
offered hereby. The Selling Stockholders received such shares of Common Stock in
a private placement transaction and the Company has agreed to file and maintain
a shelf registration statement relating to such shares in order to permit the
Selling Stockholders to resell such shares from time to time.
The Common Stock of the Company is traded on the Nasdaq National Market
("NASDAQ") under the symbol "HCIA." On November 13, 1996, the last reported
sales price for the Company's Common Stock on NASDAQ was $28 1/2 per share.
-------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 5 OF THIS PROSPECTUS FOR CERTAIN
INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON
STOCK.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, 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.
The distribution of shares of Common Stock by the Selling Stockholders
may be effected from time to time in one or more transactions (which may involve
block transactions) in the over-the-counter market, on NASDAQ or on any exchange
on which the Common Stock may then be listed in negotiated transactions, through
the writing of options on shares (whether such options are listed on an options
exchange or otherwise), or a combination of such methods of sale, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, or at negotiated prices. The Selling Stockholders may effect such
transactions by selling shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the selling stockholders and/or purchasers of
shares for whom they may act as agent (which compensation may be in excess of
customary commissions). The Selling Stockholders also may pledge shares as
collateral for margin accounts and such shares could be resold pursuant to the
terms of such accounts.
All expenses of the registration of the Common Stock covered by this
Prospectus will be borne by the Company pursuant to preexisting agreements,
except that the Company will not pay (i) any Selling Stockholder's underwriting
discounts or selling commissions, or (ii) fees and expenses of the Selling
Stockholder's counsel.
The date of this Prospectus is , 1996.
<PAGE>
THE COMPANY
HCIA is a leading health care information content company that develops
and markets integrated clinical information systems and products. The Company's
systems and products range from standardized data bases to highly focused
Decision Support Systems that assist its customers in evaluating the efficacy
and economics of health care delivery. As of September 30, 1996, HCIA had more
than 325 customers for its Decision Support Systems including hospitals,
integrated delivery systems, self-insured employers, pharmaceutical companies
and managed care organizations. The Company sold its Syndicated Products to more
than 7,000 customers as of September 30, 1996.
By utilizing its core collection of proprietary data standardization
methodologies, value-added clinical measurement tools and data bases, including
the International Classification of Clinical Services SystemTM (the "ICCS
System(TM)"), the Company creates clinical information systems and products
from its many large and disparate data streams. The ICCS System(TM) allows
for the standardization and comparison of detailed clinical data across a broad
range of data sources. The Company's proprietary disease management
methodologies link the costs, quality, utilization and outcomes of medical
services delivered to patients in various clinical settings. These
methodologies and technical resources permit the Company to provide a level of
clinical information that is substantially more detailed and useful in
modifying clinical practice patterns than information derived from traditional
health care data sources.
As a result of its unique ability to integrate health care data
collected from numerous sources and across varied treatment settings, the
Company believes that it is well positioned to offer the information systems and
products necessary to continue to increase average revenue per customer through
the sale of more sophisticated and comprehensive Decision Support Systems. The
Company continually seeks to enhance its systems and products through internal
product development efforts and acquisitions of other companies, product lines
and data resources, as well as through the creation of strategic relationships
with key health care industry participants. Since 1991 the Company has acquired,
as part of its overall growth strategy, a total of 15 health care information
companies, product lines and data resources. Most recently, the Company acquired
LBA, a provider of health care information products that combine data
collection, benchmarking and decision support tools that enable its customers to
achieve significant cost savings by (i) improving quality of outcomes, (ii)
reducing clinical resource consumption and (iii) optimizing labor utilization.
LBA's principal products include its value enhancement systems and Centers of
Excellence programs which utilize comparative data base analyses and a clinical
implementation management team to assist customers in reducing clinical resource
consumption and improving outcomes in specific practice areas, such as
orthopedics and cardiology.
The Company utilizes a highly specialized direct field sales force to
market Decision Support Systems. The Company's marketing and pricing strategies
are focused on the generation of recurring revenue from Decision Support Systems
through multi-year agreements (typically two to three years) and through the
renewal of its Syndicated Products, which are updated annually. During 1995,
approximately 69% of the Company's revenue was recurring in nature.
Unless the context otherwise requires, references in this Prospectus to
"HCIA" and the "Company" refer to HCIA Inc. and its predecessors and
subsidiaries. The Company's executive offices are located at 300 East Lombard
Street, Baltimore, Maryland 21202, and its telephone number is (410) 895-7470.
"HCIA" is a registered trademark of HCIA Inc. This Prospectus also
includes product names and other trademarks of HCIA and other companies.
2
<PAGE>
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, THE FOLLOWING FACTORS
SHOULD BE CONSIDERED CAREFULLY BY PROSPECTIVE INVESTORS.
ACQUISITIONS. The Company has, in part, expanded its systems and
products through the acquisition of health care information companies, product
lines and data resources. The Company intends to continue the acquisition of
methodological, analytical and technical resources that will further enhance and
expand the Company's systems and products.
Acquisitions involve numerous risks, including difficulties in the
assimilation of operations and products, the ability to manage geographically
remote units, the diversion of management's attention from other business
concerns, the risks of entering markets in which the Company has limited or no
direct expertise and the potential loss of key employees of the acquired
companies. In addition, acquisitions may involve the expenditure of significant
funds and the incurrence of significant charges associated with the amortization
of goodwill or other intangible assets, write-offs of acquired in-process
research and development costs and/or future write-downs of the recorded values
of assets acquired. There can be no assurance that any acquisition will result
in long-term benefits to the Company or that management will be able to manage
effectively the resulting business.
MANAGEMENT OF GROWTH. The Company is currently experiencing a period of
rapid growth and expansion which could place a significant strain on the
Company's personnel and resources. The Company's growth has resulted in an
increase in the level of responsibility for both existing and new management
personnel. Many of the Company's management personnel have had limited or no
experience in managing companies as large as the Company. The Company has sought
to manage its current and anticipated growth through the recruitment of
additional management and technical personnel and the implementation of internal
systems and controls. However, the failure to manage growth effectively could
materially and adversely affect the Company's operating results.
DEPENDENCE ON KEY PERSONNEL. The Company depends to a significant
extent on key management, technical and marketing personnel. The Company's
growth and future success will depend in large part on its ability to attract,
motivate and retain highly qualified personnel, including management personnel
of acquired companies. Except for an agreement with George D. Pillari, its
Chairman of the Board, President and Chief Executive Officer, the Company does
not have employment agreements with any of its officers. The loss of key
personnel or the inability to hire or retain qualified personnel could have a
material adverse effect on the Company.
VARIATIONS IN QUARTERLY RESULTS. The Company has experienced and
expects to continue to experience variations in quarterly results. Recent
quarterly variations are primarily due to the effect of one-time charges related
to acquired in-process research and development costs and the timing of contract
executions. Quarterly results are also influenced by the timing of release of
certain systems and products as a result of the annual release of certain
external data sources. The Company's operating results for any particular
quarterly or annual period may not be indicative of results for future periods.
DEPENDENCE ON INTELLECTUAL PROPERTY RIGHTS. The Company has made
significant investments in the development and maintenance of its core
collection of proprietary data standardization methodologies, value-added
clinical measurement tools and technical resources that are used to transform
its many large and disparate data streams into clinically relevant information
products. The Company relies largely on its license agreements with customers
and its own security systems, confidentiality procedures and employee
nondisclosure agreements to maintain the trade secrecy of its proprietary
information. There can be no assurance that the legal protections and
precautions taken by the Company will be adequate to prevent misappropriation of
the Company's proprietary information. In addition, these protections do not
prevent independent third-party development of functionally equivalent or
superior systems, products or methodologies.
COMPETITION. The health care information market is intensely
competitive and rapidly changing. The Company competes for the sale of systems
and products and the resulting access to data with different companies in each
of its target markets. Competitors vary in size and in the scope and breadth of
the products and services offered. Many of the Company's competitors have
significantly greater financial, technical, product development and marketing
resources than the Company. There can be no assurance that future competition,
or any significant loss of access to data resulting therefrom, will not have a
material adverse effect on the Company.
MAJOR CUSTOMERS. During 1994 and 1995, the Company's ten largest
customers accounted for approximately 29% and 36%, respectively, of the
Company's revenue. Many of the Company's contractual arrangements with its
customers are subject to annual renewal. The loss of one or more of the
Company's largest customers could have a material adverse effect on the Company.
INTEGRITY AND RELIABILITY OF DATA. The Company's success depends
significantly on the integrity of its data. Although the Company tests data for
completeness and consistency, it does not conduct independent audits of the
information provided by its customers. Moreover, while the Company believes that
the benchmarking and other clinical, cost and performance information contained
in its data base is representative of the operational aspects of various types
of health care industry participants, there can be no assurance that such
information is appropriate for comparative analysis in all cases or that the
data bases accurately reflect general or specific trends in the health care
market. If the information contained in the data were found, or were perceived,
to be inaccurate, or if such information were generally perceived to be
unreliable, the Company's business and operating results could be materially and
adversely affected.
POTENTIAL COST OF PERFORMANCE GUARANTEES. As part of its value
enhancement systems, LBA has guaranteed that each customer will achieve a cost
savings identified as at least equal to the fees the customer pays for the
system. To the extent such cost savings are not achieved, LBA may be subject to
claims related to such guarantees. Although LBA has never incurred a claim under
its guarantee, there can be no assurance that
3
<PAGE>
this will continue to be the case. Liabilities related to such claims could
have a material adverse effect on the Company's business and operating
results could be materially and adversely affected.
VOLATILITY OF STOCK PRICE. The stock market historically has
experienced volatility which has affected the market price of securities of many
companies and which has sometimes been unrelated to the operating performance of
such companies. The trading price of the Common Stock may be subject to
significant fluctuations in response to variations in quarterly results of
operations, announcements of acquisitions, new systems or products by the
Company or its competitors, governmental regulatory action, other developments
or disputes with respect to proprietary rights, general trends in the industry
and overall market conditions, and other factors.
CHANGES IN THE HEALTH CARE INDUSTRY. The health care industry is
subject to changing political, economic and regulatory influences that may
affect the procurement practices and operation of health care industry
participants. During the past several years, the U.S. health care industry has
been subject to an increase in governmental regulation of, among other things,
reimbursement rates and certain capital expenditures. Various programs have been
proposed to reform the U.S. health care system. Many of these programs contain
proposals to increase governmental involvement in health care, lower
reimbursement rates and otherwise change the operating environment for the
Company's customers. Health care industry participants may react to these
proposals and the uncertainty surrounding such proposals by curtailing or
deferring investments, including those for the Company's systems and products.
The Company cannot predict what impact, if any, such factors might have on its
business, financial condition and results of operations. In addition, many
health care providers are consolidating to create larger health care delivery
enterprises with greater regional market power. As a result, the remaining
enterprises could have greater bargaining power, which may lead to price erosion
of the Company's systems and products.
GOVERNMENT REGULATION. The U.S. Food and Drug Administration (the
"FDA") has promulgated a draft policy addressing the regulation of certain
computer products as medical devices under the Federal Food, Drug, and Cosmetic
Act. The FDA could determine in the future that certain applications of the
Company's systems and products are clinical decision tools subject to FDA
regulation as medical devices. In addition, the Company could become subject
to future regulation of the manufacture and marketing of medical devices and
health care software systems, or to legislation or regulation regarding the
use of patient records or of access to health care data. Compliance with such
legislation and regulation could be burdensome, time consuming and expensive.
The Company cannot predict the effect of possible future legislation and
regulation.
---------------------------
Certain statements contained herein regarding matters that are not historical
facts are forward-looking statements (as such term is defined in the Securities
Act of 1933, as amended (the "Securities Act")); and because such statements
involve risks and uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements.. Factors that could
cause actual results to differ materially include, but are not limited to, those
discussed above.
4
<PAGE>
PRICE RANGE OF COMMON STOCK
Since the initial offering of the Company's Common Stock at $14.00 per
share on February 22, 1995, the Common Stock has been traded on NASDAQ under the
symbol "HCIA". Prior to such date, there was no public market for the Common
Stock.
The following table sets forth for the quarterly periods indicated the
high and low closing sales price per share of Common Stock as reported by
NASDAQ:
HIGH LOW
1995
1st Quarter (from February 22, 1995)............ $ 25 $17 5/8
2nd Quarter..................................... 31 5/8 21
3rd Quarter..................................... 31 1/4 24 1/2
4th Quarter..................................... 46 3/4 22 3/4
1996
1st Quarter..................................... 55 3/4 41 7/8
2nd Quarter..................................... 67 7/8 45 5/8
3rd Quarter..................................... 67 3/8 48 1/2
4th Quarter (through November 13, 1996)......... 36 1/2 22 3/4
On November 13, 1996, there were 72 holders of record of the Company's
Common Stock. The number of record holders is not representative of the number
of beneficial holders since many shares are held by depositories, brokers or
other nominees. On November 13, 1996, the last reported sale price of the
Company's Common Stock on NASDAQ was $28 1/2 per share.
DIVIDEND POLICY
The Company has never paid any cash dividends on the Common Stock and
does not anticipate paying any cash dividends on the Common Stock in the
foreseeable future. The Company currently intends to retain any future
earnings to fund the development and growth of its business.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock
by the Selling Stockholders.
5
<PAGE>
SELLING STOCKHOLDERS
On August 9, 1996, the Company issued 492,961 shares of common stock to
certain stockholders of HealthVISION, Inc., the former parent company of LBA.
The shares were issued as part of the acquisition price for LBA, under the terms
of a Registration Rights Agreement, the Company agreed to file a registration
statement under the Securities Act to cover the sale of such shares, and to keep
the registration statement effective until the earlier of the date that all such
shares have been sold or for two years from the date of this Prospectus.
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by the Selling Stockholders
as of November 13, 1996, and as adjusted to reflect the assumed sale of all of
the stores offered hereby by the Selling Stockholders.
<TABLE>
<CAPTION>
Shares
Shares Beneficially Beneficially
Owned Prior To Owned After
The Offering The Offering
----------------------- Shares --------------------
Number Percent Offered Number Percent
<S><C>
Warburg, Pincus Investors, L.P. (1).......... 22,092 *% 22,092 -- --%
United HealthCare Services, Inc. (2)......... 9,404 * 9,404 -- --
HLM Partners V, L.P. (3)..................... 2,346 * 2,346 -- --
HLM Partners VII, L.P.(3).................... 9,387 * 9,387 -- --
Lawrence J. Byrne (4)........................ 116,518 1.0
Kevin J. Hicks (4)........................... 116,518 1.0
</TABLE>
- -------------------
* Less than 1%.
(1) The sole general partner of Warburg, Pincus Investors, L.P. ("WP
Investors") is Warburg, Pincus & Co., a New York general partnership
("WP"). E.M. Warburg, Pincus & Company, a New York general partnership,
manages WP Investors. WP has a 20% interest in the profits of WP
Investors and, through its wholly owned subsidiary, E.M. Warburg,
Pincus & Co., Inc. owns 1.13% of the limited partnership interests in
WP Investors. The address of WP Investors is 466 Lexington Avenue, New
York, New York 10017.
(2) The address of United HealthCare Services, Inc. is 9900 Bren Road,
East, Minnetonka, Minnesota 55343.
(3) The address of HLM Partners is 222 Berkeley Street, Suite 2150,
Boston, MA 02116.
(4) Each of Messrs. Byrne and Hicks has been a Senior Vice President
of the Company since August 12, 1996. The address of Messrs. Byrne
and Hicks is c/o the Company, 300 East Lombard Street, Baltimore,
Maryland 21202.
6
<PAGE>
PLAN OF DISTRIBUTION
The distribution of the shares of Common Stock by a Selling Stockholder
may be effected from time to time in one or more transactions (which may involve
block transactions) in the over-the-counter market, or on NASDAQ (or any
exchange on which the Common Stock may then be listed) in negotiated
transactions, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. A Selling Stockholder
may effect such transactions by selling shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of underwriting
discounts, concessions or commissions from a Selling Stockholder and/or
purchasers of shares for whom they may act as agent (which compensation may be
in excess of customary commissions). A Selling Stockholder also may pledge
shares as collateral for margin accounts and such shares may be resold pursuant
to the terms of such accounts.
In order to comply with certain state securities laws, if applicable,
the Common Stock will not be sold in any particular state unless such securities
have been registered or qualified for sale in such state or any exemption from
registration or qualification is available and complied with.
The Company will not receive any of the proceeds from the sale of
shares of Common Stock by the Selling Stockholders.
LEGAL MATTERS
The validity of the Common Stock being offered hereby will be passed
upon for the Company and the Selling Stockholders by Whiteford, Taylor & Preston
L.L.P., Baltimore, Maryland.
EXPERTS
The consolidated financial statements of the Company as of December 31,
1994 and 1995, and for each of the years in the three-year period ended December
31, 1995 incorporated by reference in this Prospectus and the Registration
Statement by reference to the Company's Annual Report on Form 10-K, as amended,
and the financial statements of William M. Mercer, Incorporated National Health
Analysis Unit as of December 31, 1994 and September 30, 1995 and for the years
ended December 31, 1993 and 1994 and the nine months ended September 30, 1995
incorporated in this Prospectus by reference to the Company's Current Report on
Form 8-K dated July 19, 1996, as amended, have been included herein and
incorporated by reference in reliance upon the reports of KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere herein or
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
The report by KPMG Peat Marwick LLP covering the consolidated
financial statements of the Company noted above refers to the adoption of the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes."
The combined balance sheet of LBA Health Care Management, Inc. and
Healthcare Data Source, Inc. (collectively, the "Predecessor Business") as of
December 31, 1994 and the combined statements of operations and retained
earnings and cash flows for the Predecessor Business for each of the years ended
December 31, 1993 and 1994 and for the period from January 1, 1995 through
September 27, 1995, the balance sheet of LBA Health Care Management, Inc. as of
December 31, 1995 and the statements of operations and retained earnings and
cash flows of LBA Health Care Management, Inc. for the period from September 28,
1995 through December 31, 1995 and the consolidated balance sheet of
HealthVISION, Inc. as of December 31, 1994 and 1995 and the consolidated
statements of operations, stockholders' equity and cash flows for the year ended
December 31, 1995 and for the period February 2, 1994 (inception) through
December 31, 1994 incorporated in this Prospectus and Registration Statement by
reference to the Company's Current Report on Form 8-K dated July 19, 1996, as
amended, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their reports thereon incorporated in this Prospectus and Registration
Statement by reference to the Company's Current Report on Form 8-K dated July
19, 1996, as amended, and are included in reliance upon such reports given on
the authority of such firm as experts in accounting and auditing.
The financial statements of Datis Corporation as of May 31, 1993 and
1994 and for the year ended May 31, 1994 and the two months ended May 31, 1993
incorporated in this Prospectus by reference to the Form 8-K of HCIA Inc. dated
July 19, 1996, as amended, have been so incorporated in reliance on the report
of Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
7
<PAGE>
ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the
Exchange Act, and, in accordance therewith, files reports and other information
with the Securities and Exchange Commission (the "Commission"). The reports and
other information filed by the Company with the Commission in accordance with
the Exchange Act may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
and at the Commission's regional offices at Seven World Trade Center, New York,
New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may also be obtained from the
Public Reference Section of the Commission at its principal office in
Washington, D.C. at prescribed rates. Such reports, proxy statements and other
information concerning the Company can be inspected at the offices of NASDAQ at
1735 K Street, N.W., Washington, D.C. 20006. The Commission maintains a Web site
at http://www.sec.gov containing reports, proxy and information statements and
other information regarding registrants, including the Company, that file
electronically with the Commission.
The Company has filed with the Commission a Registration Statement on
Form S-3 (the "Registration Statement") under the Securities Act with respect to
the Common Stock offered hereby. This Prospectus, which constitutes part of the
Registration Statement, omits certain of the information contained in the
Registration Statement and the exhibits and schedules thereto on file with the
Commission pursuant to the Securities Act and the rules and regulations of the
Commission thereunder. The Registration Statement, including exhibits and
schedules thereto, may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the Commission's regional offices at Seven World
Trade Center, New York, New York 10048 and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and copies may be obtained at
prescribed rates from the Public Reference Section of the Commission at its
principal office in Washington, D.C. Statements contained in this Prospectus as
to the contents of any contract or other document are not necessarily complete
and in each instance reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents or portions of documents filed by the Company
with the Commission are incorporated herein by reference:
(1) Annual Report on Form 10-K for the year ended December 31, 1995,
as amended by the Form 10-K/A filed on April 30, 1996.
(2) Quarterly Report on Form 10-Q for the quarter ended September 30,
1996.
(3) Current Report on Form 8-K dated July 19, 1996, as amended by
the Form 8-K/As filed August 13, 1996 and October 21, 1996.
(4) The description of the Common Stock contained in the Company's
Registration Statement under the Exchange Act on Form 8-A filed on
January 13, 1995.
All reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the Offering shall be deemed to be
incorporated by reference in this Prospectus and to be part hereof from the
filing date of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference 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 that also is incorporated or is
deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
Subject to the foregoing, all information appearing in this Prospectus is
qualified in its entirety by the information appearing in the documents
incorporated herein by reference.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON WRITTEN OR
ORAL REQUEST, AT NO CHARGE, FROM THE COMPANY. REQUESTS SHOULD BE DIRECTED
TO THE COMPANY, 300 EAST LOMBARD STREET, BALTIMORE, MARYLAND 21202, ATTENTION:
BARRY C. OFFUTT, SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER.
8
<PAGE>
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus. If given or made, such information
or representations must not be relied upon as having been authorized by the
Company or the Selling Stockholders. This Prospectus does 276,265 Shares not
constitute an offer to sell, or a solicitation of an offer to buy the Common
Stock in any jurisdiction where, or to any person to whom, it is unlawful to
make such offer or solicitation. Neither the delivery of this Prospectus nor any
sale made [HCIA logo] hereunder shall, under any circumstances, create any
implication that here has not been any change in the facts set forth in this
Prospectus or in the affairs of the Company since the date hereof.
TABLE OF CONTENTS
Page
The Company........................................ 2
Risk Factors....................................... 3
Price Range of Common Stock........................ 5
Dividend Policy.................................... 5
Use of Proceeds.................................... 5
Selling Stockholders............................... 6
Plan of Distribution............................... 7
Legal Matters...................................... 7
Experts............................................ 7
Additional Information............................. 8
Incorporation of Certain Information by Reference.. 8
276,265 Shares
[HCIA logo]
Common Stock
, 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.*
The following table sets forth a statement of all expenses payable by
the Registrant in connection with the registration of the Common Stock covered
hereby.
SEC Registration Fee............................................. $2,313
Accounting Fees and Expenses..................................... 2,000
Legal Fees and Expenses.......................................... 5,000
Blue Sky Fees and Expenses....................................... -0-
Miscellaneous Fees and Expenses.................................. 2,000
Total _______
$11,313
=======
- ---------------
*Except for the SEC Registration Fee and NASD Fee, all expenses are estimated.
Item 15. Indemnification of Directors and Officers.
Section 2-418 of the Maryland General Corporation Law (the "MGCL")
provides that the Registrant may indemnify any director who was, is or is
threatened to be made a named defendant or respondent to an threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative by reason of the fact that he is or was a director of the
Registrant, or while a director, is or was serving at the request of the
Registrant as a director, officer, partner, trustee, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust,
other enterprise or employee benefit plan, against reasonable expenses
(including attorneys' fees), judgments, penalties, fines and settlements,
actually incurred by the director in connection with such action, such or
proceeding, unless it is established that: (I) the act or omission of the
director was material to the matter giving rise to such action, suit or
proceeding, and was committed in bath faith or was the result of active and
deliberate dishonesty; (ii) the director actually received an improper personal
benefit in money, property or services; or (iii) in the case of any criminal
proceeding, the director had reasonable cause to believe that the act or
omission was unlawful. If the action, suit or proceeding was one by or in the
right of the Registrant, no indemnification shall be made with respect to any
action, suit or proceeding in which the director shall have been adjudged to be
liable to the Registrant. A director also may not be indemnified with respect to
any action, suit or proceeding charging improper personal benefit to the
director, whether or not involving action in the director's official capacity,
in which the director is adjudged to be liable on the basis that a personal
benefit was improperly received. Unless limited by the Registrant's Charter: (i)
a court of appropriate jurisdiction, upon application of a director, may order
such indemnification as the court shall deem proper if it determines that the
director is fairly and reasonably entitled to indemnification in view of all of
the relevant circumstances, regardless of whether the director has met the
standards of conduct required by Section 2-418; and (ii) the Registrant shall
indemnify a director if such director is successful on the merits or otherwise
in defense of any action, suit or proceeding referred to above. However, with
respect to any action, suit or proceeding by or in the right of the Registrant
or in which the director was adjudged to be liable on the basis that a personal
benefit was improperly received, the Registrant may only indemnify the director
for any expenses (including, attorneys' fees) incurred in connection with such
action, suit or proceeding.
Section 2-418 of the MGCL further provides that unless limited b the
Registrant's Charter, the Registrant: (i) shall (a) indemnify an officer of the
Registrant if such officer is successful on the merits or otherwise in defense
of any action, suit or proceeding referred to above, and (b) indemnify an
officer of the Registrant if a court of appropriate jurisdiction, upon
application of an officer, shall order indemnification; (ii) may indemnify and
advance expenses to an officer, employee or agent of the Registrant to the same
extent that it may indemnify directors; and (iii) may indemnify and advance
expenses to an officer, employee or agent who is not a director to such further
extent, consistent with law, as may be provided by the Charter, Bylaws, general
or specific action of the Registrant's Board of Directors or contract.
The Registrant's Bylaws provide that the Registrant shall indemnify:
(i) any individual who is a present or former director or officer of the
Registrant; or (ii) any individual who serves or has served in another
corporation, partnership, joint venture, trust, employee benefit plan or any
other enterprise as a director or officer, or as a partner or trustee of such
partnership or employee benefit plan, at the request of the Registrant and who
by reason of service in that capacity was, is or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, to the full extent
permitted under the MGCL. The Registrant may, with the approval of its Board of
Directors, provide such indemnification for a person who formerly served a
predecessor of the Registrant in any of the capacities described in (i) or (ii)
above and for any employee or agent of the Registrant or a predecessor of the
Registrant.
The Registrant's Bylaws also provide that the reasonable expenses
incurred by a director or officer who is or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, shall be paid or reimbursed by the
Registrant in advance of the final disposition of the proceeding upon request by
the Registrant of: (i) a written affirmation by the party seeking
indemnification that he has a good faith belief that the standard of conduct
necessary for indemnification by the Registrant has been met; and (ii) a written
undertaking by or on behalf of the party seeking indemnification to repay the
amount if it shall ultimately be determined that such standard of conduct has
not been met.
II-1
<PAGE>
The Registrant's Charter provides that, to the fullest extent permitted
by Maryland statutory or decisional law, as amended or interpreted, no director
or officer of the Registrant shall be personally liable to the Registrant or its
stockholders for monetary damage. The Registrant's Charter also provides that
except as the Bylaws of the Registrant may otherwise provide, no indemnification
shall be provided for any director or for any employee or agent of the
Registrant of any predecessor of the Registrant or any other entity.
The provisions in the Chapter and Bylaws do not eliminate the duty of
care. In appropriate circumstances, equitable remedies such as injunctive or
other forms of non-monetary relief remain available under Maryland law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to the Registrant or its stockholders, for acts
or omissions not in good faith or involving intentional misconduct or knowing
violations of law, for actions leading to improper personal benefit to the
director and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under the MGCL. These provisions also do not
affect a director's or officer's responsibilities under any other law, such as
the federal or state securities laws or state or federal environmental laws.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits
A list of exhibits filed with this Registration Statement on Form S-3
is set forth in the Exhibit Index on page E-1, and is incorporated herein by
reference.
(b) Financial Statement Schedules
Schedule II -- Valuation and Qualifying Accounts*
- -------------
*Incorporated by reference to the Registrant's Registration Statement on Form
S-3 (File No. 333-08639).
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total dollar
value or securities offered would be to exceed that which was registered)
and any deviation from the low or high and of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement; provided, however, that paragraph (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under
the Securities Act each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment of the Registrant of expenses
insured or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by
II-2
<PAGE>
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that:
1. For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1 or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
2. For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Baltimore,
State of Maryland, on November 13, 1996.
HCIA INC.
By:/s/ George D. Pillari
George D. Pillari, Chairman of the Board
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each director whose signature
appears below constitutes and appoints Barry C. Offutt and Charles A.
Berardesco, or either of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign for the undersigned any and
all amendments or post-effective amendments to this Registration Statement on
Form S-3 relating to the issuance of Common Stock of the Registrant, and to file
the same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission. We hereby confirm all acts taken by
such agents and attorneys-in-fact, or any one or more of them, as herein
authorized.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ George D. Pillari Chairman of the Board, November 13, 1996
George D. Pillari President and Chief Executive
Officer (principal executive
officer)
/s/ Barry C. Offutt Senior Vice President and Chief November 13, 1996
Barry C. Offutt Financial Officer (principal
financial and accounting
officer)
/s/ Phillip B. Lassiter Director November 13, 1996
Phillip B. Lassiter
/s/ Richard Dulude Director November 13, 1996
Richard Dulude
/s/ Richard Berman Director November 13, 1996
/s/ W. Grant Gregory Director November 13, 1996
/s/ Mark C. Rogers Director November 13, 1996
Mark C. Rogers
/s/ Carl J. Schramm Director November 13, 1996
Carl J. Schramm
II-4
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
1.1 *Proposed form of Underwriting Agreement (to be incorporated by
reference at the time of an offering).
2.1 +Agreement and Plan of Reorganization by and among the Registrant, HCIA
Sub Inc. and HealthVISION, Inc.
3.1 **Articles of Amendment and Restatement of the Registrant.
3.2 ***Amended and Restated Bylaws of the Registrant
5.1 Opinion of Whiteford, Taylor & Preston L.L.P. (including the consent of
such firm).
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Price Waterhouse LLP
23.3 Consent of Ernst & Young LLP
23.4 Consent of Whiteford, Taylor & Preston L.L.P. (included in Exhibit
5.1).
24.1 Power of Attorney (included as part of the signature page of this
Registration Statement).
- -----------------------------
* To be filed by amendment.
** Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (File No. 33-94946).
*** Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (File No. 33-88226).
+ Incorporated by reference to the Registrant's Current Report on Form 8-K
dated July 19, 1996, as amended.
Whiteford, Taylor & Preston
L.L.P.
Seven Saint Paul Street
Baltimore, Maryland 21202-1626
410 347-8700
Fax 410 752-7092
210 WEST PENNSYLVANIA AVENUE 1025 CONNECTICUT AVENUE, NW
TOWSON, MARYLAND 21204-4515 WASHINGTON, D.C. 20036-5405
TELEPHONE 410 832-2000 TELEPHONE 202 659-6800
FAX 410 832-2015 FAX 202 331-0573
----- -----
30 COLUMBIA CORPORATE CENTER 1317 KING STREET
10440 LITTLE PATUXENT PARKWAY ALEXANDRIA, VIRGINIA 22314-2928
COLUMBIA, MARYLAND 21044 TELEPHONE 703 836-5742
TELEPHONE 410 884-0700 FAX 703 836-0265
FAX 410-884-0719
-----
November 18, 1996
Board of Directors
HCIA Inc.
300 East Lombard Street
Baltimore, Maryland 21202
Re: Registration Statement on Form S-3
Gentlemen:
We have acted as counsel to HCIA Inc., a Maryland corporation (the
"Corporation"), in connection with a Registration Statement on Form S-3 (the
"Registration Statement") filed by the Corporation under the Securities Act of
1933, as amended (the "Act"), with respect to 276,265 shares of the common stock
of the Corporation, par value $.01 per share (the "Stock"), to be sold by
certain selling stockholders. In that capacity, we have reviewed the
Articles of Incorporation and Bylaws of the Corporation, as amended, the
Registration Statement, the records of the Corporation, and such other
materials and matters as we have deemed necessary for the issuance of this
opinion.
Based upon the foregoing, we are of the opinion that the Stock has been
duly authorized and is validly issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required by Section 7 of the
Act.
Very truly yours,
/s/ Whiteford, Taylor & Preston L.L.P.
WHITEFORD, TAYLOR & PRESTON L.L.P.
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
HCIA Inc.
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus. As
discussed in Notes 2 and 8 to the consolidated financial statements, the Company
changed its method of accounting for income taxes in 1993 to adopt the
provisions of the Financial Accounting Standard Board's Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes".
/s/ KPMG Peat Marwick LLP
Baltimore, MD
November 14, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of HCIA Inc. of
our report dated July 22, 1994, except as to Note 11 which is as of July 24,
1995, relating to the financial statements of Datis Corporation, which appears
in the Current Report on Form 8-K of HCIA Inc. dated July 19, 1996. We also
consent to the reference to us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
San Jose, California
November 14, 1996
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of HCIA, Inc. for the
registration of 276,265 shares of its common stock and to the incorporation
by reference therein of our report dated January 26, 1996, except for Note 12 as
to which the date is July 30, 1996, with respect to the consolidated balance
sheets of HealthVISION, Inc. as of December 31, 1995 and 1994, and the related
consolidated statements of operations, stockholders' equity and cash flows for
the year ended December 31, 1995 and for the period February 2, 1994 (inception)
through December 31, 1994 and our report dated January 12, 1996, except for
Note 8 as to which the date is July 30, 1996, with respect to the combined
balance sheet of LBA Health Care Management, Inc. and Healthcare Data Source,
Inc. (collectively, the "Predecessor Business") as of December 31, 1994, the
related combined statements of operations and retained earnings and cash flows
for the Predecessor Business for the years ended December 31, 1993 and 1994
and for the period from January 1, 1995 through September 27, 1995, the balance
sheet of LBA Health Care Management, Inc. as of December 31, 1995, and the
related statements of operations and retained earnings and cash flows of LBA
Health Care Management, Inc. for the period from September 28, 1995 through
December 31, 1995 included in Form 8-K/A-2 of HCIA, Inc., filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Walnut Creek, California
November 14, 1996
