-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TUS8eZng1rq3kg88lxXEhSjTVqUsFZNV0HJvXrGbbWEvpFEDnUMYZ5+i0FQAbUGB nyJiDvW3nz732uu4BmXFPA== 0000898430-97-005348.txt : 19971222 0000898430-97-005348.hdr.sgml : 19971222 ACCESSION NUMBER: 0000898430-97-005348 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971219 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971219 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: RENAL TREATMENT CENTERS INC /DE/ CENTRAL INDEX KEY: 0000899169 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SPECIALTY OUTPATIENT FACILITIES, NEC [8093] IRS NUMBER: 232518331 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-14142 FILM NUMBER: 97740849 BUSINESS ADDRESS: STREET 1: 1180 WEST SWEDESFORD RD STREET 2: BLDG 2, STE 300 CITY: BERWYN STATE: PA ZIP: 19312 BUSINESS PHONE: 6106444796X6176 MAIL ADDRESS: STREET 1: 1180 WEST SWEDESFORD ROAD BLDG 2 STREET 2: SUITE 300 CITY: BERWYN STATE: PA ZIP: 19312 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) December 19, 1997 ----------------------------- Renal Treatment Centers, Inc. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 1-14142 23-2518331 - ------------------------------------------------------------------------------- (State or other (Commission (I.R.S. Employer jurisdiction File Number) Identification No.) of incorporation) 1180 W. Swedesford Road, Building 2, Suite 300, Berwyn, PA 19312 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (610) 644-4796 ---------------------------- Not Applicable -------------------------------------------------------------- (Former name or former address, if changed since last report.) ITEM 5. OTHER EVENTS On November 18, 1997, Renal Treatment Centers, Inc. ("RTC" or the "Company") entered into an Agreement and Plan of Merger dated as of November 18, 1997 (the "Merger Agreement") among RTC, Total Renal Care Holdings, Inc. ("TRCH") and Nevada Acquisition Corp. ("Newco"). Pursuant to and subject to the terms and conditions of the Merger Agreement, Newco will be merged with and into RTC, in connection with which each share of RTC common stock will be converted into 1.335 shares of TRCH common stock (the "Merger"). The Merger will require the approval of the shareholders of RTC and TRCH and is subject to other customary closing conditions. The Merger is expected to be consummated in the first quarter of 1998; however, no assurance can be given that the consummation of the Merger will occur on this timetable. The accompanying unaudited pro forma combined financial information is filed for the sole purpose of incorporation by reference into the Joint Proxy Statement/Prospectus of TRCH and RTC, included in the Registration Statement on Form S-4 of TRCH, which is being filed on the date hereof. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (b) PRO FORMA FINANCIAL INFORMATION. Unaudited Pro Forma Financial Statements F-1 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. RENAL TREATMENT CENTERS, INC. Dated: December 19, 1997 By:/s/ Ronald H. Rodgers, Jr. ----------------------------- Ronald H. Rodgers, Jr. CFO and Vice President - Finance 3 RENAL TREATMENT CENTERS, INC. UNAUDITED PRO FORMA FINANCIAL INFORMATION The accompanying unaudited pro forma condensed combined balance sheet as of September 30, 1997 and the pro forma condensed combined statements of income for the nine months ended September 30, 1997 and 1996 and the year ended December 31, 1996, are based upon, and should be read in conjunction with, the historical unaudited financial statements of RTC included in RTC's Quarterly Report on Form 10-Q for the quarter ended September 30, 1997 also incorporated by reference in the Joint Proxy Statement/Prospectus, after giving effect to the Current Report on Form 8-K dated October 6, 1997 of RTC (the "October 6th Form 8-K") and additional unaudited historical financial information regarding certain acquired companies as described below. These unaudited pro forma condensed combined financial statements are not necessarily indicative of the operating results that would have been achieved had the acquisitions described below been consummated as of the beginning of the periods presented and should not be construed as representative of future operating results. These unaudited pro forma condensed combined financial statements give effect to the respective acquisitions using the purchase method of accounting. The unaudited pro forma condensed combined balance sheet as of September 30, 1997 and the unaudited pro forma condensed combined statement of income for the nine months ended September 30, 1997 give effect to the acquisition by RTC of substantially all of the non-current and certain other assets of California Kidney Centers, California Kidney Centers, Orange, LLC, California Kidney Centers, Inpatient Services, LLC, Dialysis Systems, LLC and Dialysis Systems, Inpatient Services, LLC (collectively, the "Satellite Affiliated Companies") as if the acquisition had occurred on January 1, 1997. The historical financial information presented for the Satellite Affiliated Companies is based on the unaudited combined balance sheet of the Satellite Affiliated Companies as of September 30, 1997 and the unaudited combined statements of income for the nine months ended September 30, 1997, as provided to RTC by the Satellite Affiliated Companies. The unaudited pro forma condensed statements of income for the nine months ended September 30, 1996 and the year ended December 31, 1996 give effect to the acquisitions by RTC of substantially all of the non-current and certain other assets of (i) the Satellite Affiliated Companies, (ii) Kidney Center of Delaware County, Ltd. and Kidney Center of Chester County, Ltd. (collectively, "KCDC/KCCC") and (iii) Columbus Regional Dialysis Center, Inc. and Phenix City Nephrology Referral Center, Inc. (collectively, "CRDC/PCNRC"), as if each of the acquisitions had occurred on January 1, 1996. The historical financial information presented for the Satellite Affiliated Companies is based on the unaudited combined statements of income of the Satellite Affiliated Companies for the nine months ended September 30, 1996, as provided to RTC by the Satellite Affiliated Companies, and the audited combined statements of income of the Satellite Affiliated Companies for the year ended December 31, 1996, included in the October 6th Form 8-K. The historical financial information presented for KCDC/KCCC is for the five months ended May 31, 1996, based on the unaudited combined statements of operations of KCDC/KCCC for the three months ended March 31, 1996, as provided to RTC by KCDC/KCCC, and includes estimated amounts for the two months ended May 31, 1996. KCDC/KCCC is included in the historical statements of income for RTC beginning June 1, 1996. The historical financial information presented for CRDC/PCNRC is for the eight months ended August 31, 1996, based on the unaudited combined statements of income of CRDC/PCNRC for the six months ended June 30, 1996, as provided to RTC by CRDC/PCNRC, and includes estimated amounts for the two months ended August 31, 1996. CRDC/PCNRC is included in the historical statements of income for RTC beginning September 1, 1996. The unaudited pro forma financial information included herein is based on certain assumptions and adjustments described in the Notes thereto and should be read in conjunction therewith and with "Management's Discussion and Analysis of Financial Condition and Results of Operations," and the consolidated financial statements of RTC and the related Notes thereto, in RTC's Annual Report on Form 10-K for the fiscal year ended December 31, 1996 and the condensed consolidated financial statements in RTC's Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 1997, each of which is also incorporated by reference in the Joint Proxy Statement/Prospectus. F-1 RENAL TREATMENT CENTERS, INC. Unaudited Pro Forma Condensed Combined Balance Sheet September 30, 1997 (in thousands)
The Satellite Company Affiliated Pro Forma (Historical) Companies Adjustments Combined Cash and cash equivalents $ 8,767 $ 2,991 $ (2,891)(a) $ 8,767 Accounts receivable, net 109,311 11,188 (11,188)(a) 109,311 Other current assets 11,387 1,919 (1,195)(a) 12,111 -------- --------- --------- -------- Total current assets 129,465 16,098 (15,374) 130,189 Property & equipment, net 62,613 5,284 558 (a) 68,453 Intangible assets, net 232,855 12,012 98,224 (a) 343,091 Other assets 2,807 - - 2,807 -------- --------- --------- -------- $427,740 $ 33,394 $ 83,406 $544,540 ======== ========= ========= ======== Current liabilities $ 35,071 $ 7,575 $ (7,575)(a) $ 35,071 Long-term debt 229,228 4,259 112,541 (b) 346,028 Common stock 250 7,124 (7,124)(c) 250 Additional paid-in capital 94,153 7,607 (7,607)(c) 94,153 Retained earnings 69,426 6,829 (6,829)(c) 69,426 Less: Treasury Stock (388) - - (388) -------- --------- --------- -------- $427,740 $ 33,394 $ 83,406 $544,540 ======== ========= ========= ======== See accompanying notes to unaudited pro forma condensed combined financial statements.
F-2 RENAL TREATMENT CENTERS, INC. Unaudited Pro Forma Condensed Combined Statement of Income Nine months ended September 30, 1997 (in thousands except per share amounts)
Satellite Affliated The Company Companies 9 months ended 9 months ended Septemer 30, 1997 September 30, 1997 Pro Forma (Historical) (Historical) Adjustments Combined Net operating revenues $ 234,940 $ 35,291 $ - $ 270,231 Operating expenses 196,143 28,084 3,037 (a) 226,264 --------- --------- --------- --------- Operating income 39,797 7,207 (3,037) 43,967 Interest expense, net 7,095 236 5,724 (b) 13,055 --------- --------- --------- --------- Income before income taxes 32,702 6,971 (8,761) 30,912 Income taxes 12,277 - (672)(c) 11,605 --------- --------- --------- --------- Income $ 20,425 $ 6,971 $ (8,089) $ 19,307 ========= ========= ========= ========= Income per share (d) $ 0.79 $ 0.75 ========= ========= Weighted average number of common shares and equivalents outstanding 25,706 25,706 ========= ========= See accompanying notes to unaudited pro forma condensed combined financial statements.
F-3 RENAL TREATMENT CENTERS, INC. Unaudited Pro Forma Condensed Combined Statement of Income Nine months ended September 30, 1996 (in thousands except per share amounts)
Satellite Afilliated The Company Companies KCDC/KCCC CRDC/PCNRC 9 months ended 9 months ended 5 months ended 8 months ended September 30, September 30, May 31, August 31, 1996 1996 1996 1996 Pro Forma (Historical) (Historical) (Historical) (Historical) Adjustments Combined Net operating revenues $ 169,248 $ 32,406 $ 5,451 $ 3,929 $ - $ 211,034 Operating expenses 144,879 26,172 5,284 3,037 4,794 (a) 184,166 --------- --------- --------- -------- -------- ---------- Operating income 24,369 6,234 167 892 (4,794) 26,868 Interest expense, net 2,978 276 55 (2) 7,069 (b) 10,376 --------- --------- --------- -------- -------- ---------- Income before income taxes 21,391 5,958 112 894 (11,863) 16,492 Income taxes 8,300 - - - (1,901)(c) 6,399 ---------- --------- --------- -------- -------- ---------- Income $ 13,091 $ 5,958 $ 112 $ 894 $ (9,962) $ 10,093 ========== ========= ========= ======== ======== ========== Income per share (d) $ 0.52 $ 0.40 ========== ========== Weighted average number of common shares and equivalents outstanding 25,018 25,018 ========== ==========
See accompanying notes to unaudited proforma condensed combined financial statements. F-4 RENAL TREATMENT CENTERS, INC. Unaudited Pro Forma Condensed Combined Statement of Income Year ended December 31, 1996 (in thousands except per share amounts)
Satelite Affilated The Company Companies KCDC/KCCC Year ended Year ended 5 months ended December 31, 1996 December 31, 1996 May 31, 1996 (Historical) (Historical) (Historical) Net operating revenues $235,397 $43,208 $5,451 Operating expenses 199,782 34,334 5,284 -------- ------- ------ Operating income 35,615 8,874 167 Interest expense, net 4,384 368 55 -------- ------- ------ Income before income taxes 31,231 8,506 112 Income taxes 11,941 - - -------- ------- ------ Income $ 19,290 $ 8,506 $ 112 ======== ======= ====== Income per share (d) $ 0.77 ======== Weighted average number of common shares and equivalents outstanding 25,068 ======== CRDC/PCNRC 8 months ended August 31, 1996 Pro Forma (Historical) Adjustments Combined Net operating revenues $3,929 $ - $287,985 Operating expenses 3,037 6,451 (a) 248,888 ------ -------- -------- Operating income 892 (6,451) 39,097 Interest expense, net (2) 9,320 (b) 13,801 ------ -------- -------- Income before income taxes 894 (15,447) 25,296 Income taxes - (2,269)(c) 9,672 ------ -------- -------- Income $ 894 $(13,178) $ 15,624 ====== ======== ======== Income per share (d) $ 0.62 ======== Weighted average number of common shares and equivalents outstanding $ 25,068 ======== See accompanying notes to unaudited proforma condensed combined financial statements.
F-5 RENAL TREATMENT CENTERS, INC. NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS 1. General In November 1997 the Company acquired substantially all of the non-current and certain other assets of the Satellite Affiliated Companies. In June 1996 the Company acquired substantially all of the non-current and certain other assets of KCDC/KCCC. And in August 1996 the Company acquired substantially all of the non-current and certain other assets of CRDC/PCNRC. The Satellite Affiliated Companies, KCDC/KCCC, and CRDC/PCNRC are hereinafter referred to collectively as the "Sellers". All of the foregoing transactions were accounted for under the purchase method of accounting. The results of the acquisitions have been included in the historical results of operations for the Company from the applicable acquisition dates. 2. Basis of Presentation The Unaudited Pro Forma Financial Statements are presented to illustrate (i) the pro forma effects on the Company's balance sheet as of September 30, 1997 as if the purchase of the Satellite Affiliated Companies occurred on September 30, 1997 and (ii)the pro forma effects on the Company's results of operations for the nine month period ended September 30, 1997 as if the purchase of the Satellite Affiliated Companies occurred on January 1, 1997 and the nine month period ended September 30, 1996 and for the year ended December 31, 1996 as if the purchase of the Satellite Affiliated Companies, KCDC/KCCC and CRDC/PCNRC occurred on January 1, 1996. The unaudited pro forma financial statements include adjustments resulting from the use of the purchase method of accounting and are not necessarily indicative of what the combined financial position or results of operations would have been had the transactions occurred on January 1, 1997 or January 1, 1996, nor are they necessarily indicative of future results of the combined entities. Certain pro forma adjustments are based on preliminary estimates of the fair values of assets acquired and are thus subject to change. 3. Adjustments to Pro Forma Condensed Combined Balance Sheet a) Adjusts assets to fair market value and eliminates certain assets and liabilities of the Satellite Affiliated Companies not assumed by the Company in connection with the acquisition. b) Reflects an increase in long-term debt to account for payment of the purchase price. c) To eliminate the equity of the acquired businesses. 4. Adjustments to Pro Forma Condensed Combined Statements of Operations a) Reflects adjustment to eliminate management fees incurred by the Satellite Facilities. In addition, reflects depreciation and amortization expense resulting from the revaluation required by the purchase method of accounting for fixed assets and intangible assets of $5,951,960, $7,891,017 and $10,521,356, offset by the Sellers historical depreciation and amortization of $1,523,538, $1,806,493 and $2,347,493 for the nine month periods ended September 30, 1997 and 1996 and the year ended December 31, 1996, respectively. Included in these amounts is amortization over a 25-year period of the excess cost over net assets acquired of $2,325,945, $3,081,627 and $4,108,836 for the nine month periods ended September 30, 1997 and 1996 and the year ended December 31, 1996, respectively, as if the acquisitions occurred on January 1, 1997 or January 1, 1996, respectively. b) Reflects an adjustment to interest expense to account for long-term debt incurred in connection with the acquisitions, as well as the elimination of interest expense on borrowings not assumed by the Company. c) Reflects the adjustments to income taxes which would have been provided on pro forma income before taxes. d) Pro forma net income per common and common stock equivalents is computed by dividing pro forma net income by the weighted average number of common and common stock equivalents outstanding during the period. F-6 -----END PRIVACY-ENHANCED MESSAGE-----