-----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, PSiuNHrKOC3EkY6gmDYBsYP3aE7t2NhK8BFJiISR7/IWF2y4Gicbn4ksnOaSNECi PN9XJN164KE1aZDXW6ga0g== 0000950109-96-003657.txt : 19960607 0000950109-96-003657.hdr.sgml : 19960607 ACCESSION NUMBER: 0000950109-96-003657 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960606 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: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-14142 FILM NUMBER: 96577675 BUSINESS ADDRESS: STREET 1: 1180 WEST SWEDESFORD RD STREET 2: BLDG 2, STE 300 CITY: BERWYN STATE: PA ZIP: 19312 BUSINESS PHONE: 2156444796 MAIL ADDRESS: STREET 1: 1180 WEST SWEDESFORD ROAD BLDG 2 STREET 2: SUITE 300 CITY: BERWYN STATE: PA ZIP: 19312 10-Q/A 1 FORM 10-Q/A Form 10-Q/A SECURITIES AND EXCHANGE COMMISSION (Mark One) Washington, D.C. 20549 AMENDMENT NO. 1 (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 -------------------------- ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number 1-14142 Renal Treatment Centers, Inc. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 23-2518331 - ---------------------------------------- -------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1180 W. Swedesford Road Building 2, Suite 300 Berwyn, PA 19312 - ---------------------------------------- -------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code 610-644-4796 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Class Outstanding at May 31, 1996 ----- ----------------------------------- Common Stock, Par Value $.01 23,593,986 shares RENAL TREATMENT CENTERS, INC. AND SUBSIDIARIES INDEX
Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Consolidated Statements of Income-- Three months ended March 31, 1996 and 1995 .................................................. 3 Consolidated Balance Sheets-- March 31, 1996 and December 31, 1995 ...................... 4 Consolidated Statements of Cash Flows-- Three months ended March 31, 1996 and 1995 ................ 5 Notes to Consolidated Financial Statements ................ 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ................................................ 7 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K .......................... 10 - 11 SIGNATURES ........................................................... 12 EXHIBITS ............................................................. 13
PART I. FINANCIAL INFORMATION Item 1. Financial Statements Renal Treatment Centers, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited)
Three Months Ended March 31, 1996 1995 - -------------------------------------------------------------------------------- Net patient revenue $49,204,164 $36,314,340 Patient care costs 23,706,233 17,798,201 - -------------------------------------------------------------------------------- Operating profit 25,497,931 18,516,139 General and administrative expense 12,903,283 10,040,945 Provision for doubtful accounts 1,535,944 959,512 Depreciation and amortization 3,536,388 2,699,353 Merger expenses 1,708,247 1,587,542 - -------------------------------------------------------------------------------- Income from operations 5,814,069 3,228,787 Interest expense, net 665,808 630,655 - -------------------------------------------------------------------------------- Income before income taxes 5,148,261 2,598,132 Provision for income taxes 1,990,207 564,963 - -------------------------------------------------------------------------------- Net income $3,158,054 $2,033,169 - -------------------------------------------------------------------------------- Net income per common and $0.13 $0.09 common stock equivalent ===== ===== Weighted average number of common and common stock equivalents outstanding 24,278,435 21,531,600 ========== ==========
See accompanying notes to consolidated financial statements. Renal Treatment Centers, Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS
(Unaudited) March 31, December 31, 1996 1995 - ------------------------------------------------------------------------------- Assets Current assets: Cash $2,657,638 $7,624,259 Accounts receivable, net of allowance for doubtful accounts of $3,500,000 in 1996 and $3,200,000 in 1995 56,090,971 51,351,999 Inventories 3,522,878 2,683,234 Deferred taxes 1,412,519 819,835 Prepaid expenses and other current assets 1,023,065 1,391,775 - ------------------------------------------------------------------------------- Total current assets 64,707,071 63,871,102 - ------------------------------------------------------------------------------- Property and equipment (net of accumulated depreciation of $14,253,577 in 1996 and $10,378,141 in 1995.) 24,952,573 20,087,284 Intangibles (net of accumulated amortization of $24,475,492 in 1996 and $22,263,385 in 1995.) 86,055,057 86,341,433 Deferred taxes, non-current 1,749,754 1,749,754 - ------------------------------------------------------------------------------- Total assets $177,464,455 $172,049,573 =============================================================================== Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt $4,742,845 $4,539,635 Accounts payable 5,416,174 4,222,147 Accrued compensation 3,300,300 2,670,384 Accrued expenses 4,469,349 6,576,600 Accrued income taxes 2,320,777 2,218,692 Accrued interest 745,647 1,087,415 - ------------------------------------------------------------------------------- Total current liabilities 20,995,092 21,314,873 - ------------------------------------------------------------------------------- Long-term debt, net 40,503,340 41,654,966 Stockholders' equity: Preferred stock, $.01 par value, 5,000,000 shares authorized: none issued Common stock, $.01 par value, 45,000,000 shares authorized: issued and outstanding 23,619,076 and 21,727,312 shares in 1996 and 1995, respectively. 236,191 217,273 Additional paid-in capital 83,619,838 83,006,891 Retained earnings 32,504,070 26,249,646 - ------------------------------------------------------------------------------- 116,360,099 109,473,810 - ------------------------------------------------------------------------------- Less treasury stock, 37,202 shares in 1995 and 1996, at cost (394,076) (394,076) - ------------------------------------------------------------------------------- 115,966,023 109,079,734 - ------------------------------------------------------------------------------- Total liabilities and stockholders' equity $177,464,455 $172,049,573 ===============================================================================
See accompanying notes to consolidated financial statements. Renal Treatment Centers, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited)
Three Months ended March 31, 1996 1995 - ----------------------------------------------------------------------------------------- Cash flows from operating activities: Net income $3,158,054 $2,033,169 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,547,223 2,715,700 Provision for doubtful accounts 1,535,944 959,512 Equity in (earnings) losses from affiliates 242,372 1,645 Changes in operating assets and liabilities, net of effects of companies acquired: Accounts receivable (2,931,954) (4,186,291) Inventories (813,448) 290,029 Prepaid expenses and other current assets 431,081 32,545 Accounts payable and accrued expenses (3,960,540) 932,640 Accrued income taxes 102,085 509,113 - ----------------------------------------------------------------------------------------- Net cash provided by operating activities 1,310,817 3,288,062 - ----------------------------------------------------------------------------------------- Cash flows from investing activities: Capital expenditures (2,005,302) (2,037,437) Purchase of businesses, net of cash acquired (2,010,241) (5,144,291) Purchase of investments - 979,104 Other (684,373) (333,281) - ----------------------------------------------------------------------------------------- Net cash used in investing activities (4,699,916) (6,535,905) - ----------------------------------------------------------------------------------------- Cash flows from financing activities: Proceeds from long-term debt borrowings 1,500,000 8,000,000 Repayments of debt (3,587,473) (4,944,401) Proceeds from issuance of common stock 524,581 58,806 Payment of dividends - (123,812) Payments on capital lease obligations (978,329) (256,964) Cash portion of consideration received for common stock 963,699 - - ----------------------------------------------------------------------------------------- Net cash (used in) provided by financing activities (1,577,522) 2,733,629 - ----------------------------------------------------------------------------------------- Net decrease in cash and cash equivalents (4,966,621) (514,214) Cash and cash equivalents at beginning of period 7,624,259 2,152,322 - ----------------------------------------------------------------------------------------- Cash and cash equivalents at end of period $2,657,638 $1,638,108 - ----------------------------------------------------------------------------------------- Supplemental disclosures of cash flows information: Cash paid during the period for: Interest expense $1,088,054 $316,391 Income taxes $2,824,703 $389,577 Noncash financing activities: Reduction of note issued in connection with purchase of business - $135,900 Acquisition of treasury stock in connection with payroll taxes resulting from exercise of stock options - $346,857 Capital lease obligations entered into $416,950 - Issuance of common stock in connection with purchase of business $89,137 - Noncash investing activities: Net assets relating to pooling transactions $3,096,370 -
See accompanying notes to consolidated financial statements Renal Treatment Centers, Inc. and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) 1. BUSINESS ACQUISITIONS: On February 20, 1996, the Company acquired Intercontinental Medical Services, Inc. ("IMS"), which operated four dialysis facilities in Hawaii. The transaction was accounted for as a pooling of interests. Accordingly, the Company's financial statements include the results of IMS as of January 1, 1996. In total, 1,047,464 shares of the Company's common stock were exchanged for all outstanding shares of IMS. On February 29, 1996, the Company acquired Midwest Dialysis Units and its affiliates (collectively "MDU"), which operated 11 dialysis facilities in Oklahoma. The transaction was accounted for as a pooling of interests. Accordingly, the Company's financial statements include the results of MDU as of January 1, 1996. In total 767,168 shares of the Company's common stock were exchanged for all outstanding shares of MDU. Prior year financial statements have not been restated to reflect these transactions because the impact on the Company's financial statements of such transactions is not material. 2. BASIS OF PRESENTATION: The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 1996 are not necessarily indicative of the results that may be expected for the year ending December 31, 1996. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's Form 10-K filed with the Securities and Exchange Commission on April 1, 1996. 3. COMMITMENTS AND CONTINGENCIES: The Company is a party to certain legal actions arising in the ordinary course of business. The Company believes it has adequate legal defenses and/or insurance coverage for these actions and that the ultimate outcome of these actions will not have a material adverse impact on the Company's results of operations, financial condition or liquidity. Item 2. Renal Treatment Centers, Inc. and Subsidiaries Management's Discussion and Analysis of Financial Condition and Results of Operations Overview Renal Treatment Centers, Inc. is a leading, high-quality provider of dialysis treatments and ancillary services to patients suffering from chronic kidney failure, primarily in its freestanding outpatient dialysis treatment centers or in the patient's home. The Company also provides acute inpatient dialysis services to hospitals. As of April 30, 1996, the Company operated 96 outpatient dialysis centers in 21 states, the District of Columbia and the Republic of Argentina and provided dialysis services for approximately 6,200 patients. In addition, the Company provided inpatient dialysis services at 68 hospitals. Results of Operations The following table sets forth, for the periods indicated, selected financial information expressed as a percentage of net patient revenue and the period-to- period percentage changes in such information.
Percentage of Net Patient Revenue Three Months Ended Period-to-Period March 31, Percentage Change - -------------------------------------------------------------------------------- 1996 1995 1996 vs. 1995 - -------------------------------------------------------------------------------- Net patient revenue 100.0% 100.0% 35.5% Patient care costs 48.2% 49.0% 33.2% General and administrative expense 26.2% 27.7% 28.5% Provision for doubtful accounts 3.1% 2.6% 60.1% Depreciation and amortization expense 7.2% 7.4% 31.0% Merger expenses 3.5% 4.4% 7.6% Income from operations 11.8% 8.9% 80.1% Interest expense, net 1.4% 1.7% 5.6% Provision for income taxes 4.0% 1.6% 252.3% Net income 6.4% 5.6% 55.3% - ------------------------------------------------------------------------------
Three months ended March 31, 1996 Compared to Three Months Ended March 31, 1995 Net Patient Revenue. Net patient revenue for the three months ended March 31, 1996 was $49,204,164 as compared to $36,314,340 for the same period in 1995, representing an increase of 35.5%. Of this increase, $2,494,843, or 19.4%, was attributable to the revenue generated from the operations of eight centers and certain acute care agreements acquired in three separate purchase transactions from March through December 1995, and $6,355,145, or 49.3%, was attributable to the acquisition of various facilities and the development of new dialysis centers ("de novo developments") during the first quarter of 1996. Of the $4,039,836 remaining, $2,553,051 was attributable to an increase in same-center treatments and $1,486,785 was attributable to an increase in the average same- center revenue per treatment, which, in turn, was due to an increase in the administration of EPO and other ancillary revenue items and and an improvement in the Company's payor mix. Patient Care Costs. Patient care costs increased 33.2% to $23,706,233 for the three months ended March 31, 1996 from $17,798,201 for the same period in 1995. The increase was principally the result of acquisitions that occurred subsequent to the first quarter of 1995. However, as a percentage of net patient revenue, patient care costs decreased to 48.2% for the three months ended March 31, 1996 from 49.0% for the same period in 1995. This Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) decrease was primarily related to the increase in net revenue per treatment. The increase in net revenue per treatment was offset in part by the additional costs related to the increased administration of reimbursable drugs. General and Administrative Expense. General and administrative expense increased $2,862,338, or 28.5%, to $12,903,283 for the three months ended March 31, 1996, as compared to $10,040,945 for the same period in 1995. This increase was primarily the result of additional facility operating costs as well as additional corporate and facility personnel required to support the centers acquired and opened during 1995 and 1996. As a percentage of net patient revenue, these expenses were approximately 26.2% for the three months ended March 31, 1996, as compared to 27.7% for the same period in 1995. The decrease as a percentage of net patient revenue was attributable to the Company's ability to maintain certain support costs, while increasing net patient revenue through acquisitions, internal growth and de novo developments. Provision for Doubtful Accounts. Provision for doubtful accounts increased $576,432, or 60.1%, to $1,535,944 for the three months ended March 31, 1996, as compared to $959,512 for the same period in 1995. This increase was principally a result of the additional net patient revenue generated from acquisitions that occurred subsequent to the first quarter of 1995. As a percentage of net patient revenue the provision for doubtful accounts increased to 3.1% for the three months ended March 31, 1996 from 2.6% for the same period in 1995. Depreciation and Amortization Expense. Depreciation and amortization expense increased $837,035, or 31.0%, to $3,536,388 for the three months ended March 31, 1996, as compared to $2,699,353 for the same period in 1995. The increase was due to the acquisition of various facilities and de novo developments since March 1995. As a percentage of net patient revenue, depreciation and amortization expense was 7.2% for the three months ended March 31, 1996, as compared to 7.4% for the same period in 1995. Merger Expenses. Merger expenses represent expenses incurred in connection with the mergers with (i) Healthcare Corporation and its affiliates, (ii) IMS and (iii) MDU, which were completed on March 6, 1995, February 20, 1996 and February 29, 1996, respectively, and were accounted for under the pooling-of-interests method of accounting. These expenses included investment banking, legal, accounting and other fees and expenses. Income from Operations. Income from operations increased 80.1% to $5,814,069 for the three months ended March 31, 1996 from $3,228,787 for the same period in 1995. The increase was due to the increase in net patient revenue from acquired businesses and same-center growth, which was greater than the increases in patient care costs, general and administrative expense and depreciation and amortization expense related to such acquired businesses. Interest Expense, Net. Interest expense, net was $665,808 for the three months ended March 31, 1996 as compared to $630,655 for the same period in 1995. The increase in interest expense, net was attributable to the additional borrowings for the funding of acquisitions that were completed in 1995 and 1996 that remained outstanding during the three months ended March 31, 1996. Provision for Income Taxes. Provision for income taxes increased to $1,990,207 for the three months ended March 31, 1996 from $564,963 for the same period in 1995. For the three months ended March 31, 1996, the Company's effective tax rate was 38.7%, compared to an effective tax rate of 21.7% during the same period in 1995. The increase in the effective tax rate was primarily attributable to the one-time tax benefit of $325,000 recorded in the first quarter of 1995 as a result of the merger with Healthcare Corporation and its affiliates. In addition, the Company incurred a one-time tax charge of $85,350 related to the merger with MDU recorded in the first quarter of 1996. Net Income. Net income increased 55.3% to $3,158,054 for the three months ended March 31, 1996 from $2,033,169 for the same period in 1995. The increase was due to each of the items discussed above. Liquidity and Capital Resources The Company requires capital for the acquisition of dialysis centers, for the expansion of operations of its existing dialysis centers, including the replacement of equipment and addition of leasehold improvements, for the integration of new centers into its network of existing dialysis services and for meeting working capital requirements. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) During the three months ended March 31, 1996, expenditures for acquisitions totalled $2,010,241, compared to $5,144,291 for acquisitions for the three months ended March 31, 1995. The expenditures in 1996 resulted from the acquisition of one center in March 1996, as compared to the expenditures in 1995 which resulted from the acquisition of five centers in March 1995. For the three months ended March 31, 1996 and 1995, capital expenditures were $2,005,302 and $2,037,437, respectively. Cash from operations before investing and financing activities was $1,310,816 and $3,288,062 for the three months ended March 31, 1996 and 1995, respectively. The principal sources of the Company's liquidity during the first three months of 1996 were earnings and additional external borrowings under the Company's revolving credit agreement with a consortium of banks. The Company had cash and cash equivalents of $2,657,638 at March 31, 1996. The Company's loan and revolving credit agreement with a consortium of banks (the "Credit Agreement") provides for a $68.125 million revolving credit/term facility available to fund acquisitions and general working capital requirements, on which $33,675,000 and $33,175,000 was outstanding at December 31, 1995 and March 31, 1996, respectively, and a term loan payable in quarterly installments, of which $3,750,000 and $3,125,000 was outstanding as of December 31, 1995 and March 31, 1996, respectively. The revolving credit/term facility converts into a term loan in September 1997 that is payable in 16 equal quarterly installments commencing December 1997 through September 2001. Borrowings under the Credit Agreement bear interest, at the Company's option, at either (i) the agent bank's base rate, adjusted by the applicable margin, which is determined by the Company's ratio of senior debt to annualized cash flow, which was 8.3% at March 31, 1996, payable on a monthly basis, or (ii) a one-, two-, three-, or six-month period LIBOR rate, adjusted by the applicable margin for LIBOR based loans. The weighted average interest rate of all loans outstanding at December 31, 1995 and March 31, 1996 was 7.4% and 6.7%, respectively. The loans are collateralized by the pledge of all stock of the Company's subsidiaries, a lien on all of the Company's assets and the assignment of various acquisition, acute care, physician director and other agreements. The Company has historically expended the majority of its capital resources to implement its growth strategy and the Company intends to pursue a strategy of growth through the acquisition and development of dialysis centers. Management estimates that the development of a new center, depending on its size, requires approximately $350,000 to $500,000 for construction costs and the purchase of certain furniture and equipment (leasing certain of the assets can decrease costs) and approximately $75,000 to $150,000 in working capital. Acquisition of a dialysis center with an existing patient base typically requires more capital investment, but each investment varies based on relative size and other factors. No assurance can be given that the Company will be successful in implementing its growth strategy or that adequate sources of capital will be available on terms acceptable to the Company to pursue its growth strategy in the future. The Company believes that capital resources available to it will be sufficient to meet the needs of its business, both on a short- and long-term basis. Impact of Inflation A substantial portion of the Company's revenue is subject to reimbursement rates which are regulated by the federal government and do not automatically adjust for inflation. These reimbursement rates are adjusted periodically based on certain factors, including legislation, executive and congressional budget reduction and control processes, inflation and costs incurred in rendering services, but in the past have had little relationship to the actual cost of doing business. The Company can increase the amounts it bills only for those services provided by its dialysis business that are not subject to the Medicare composite rate. Increases in operating costs that are subject to inflation, such as labor and supply costs, without a compensating increase in reimbursement rates, may adversely affect the Company's earnings in the future. Part II. Other Information - -------- ----------------- Item 4. Submission of Matters to a Vote of Security Holders. (a) A Special Meeting of the Company's Stockholders was held on February 29, 1996. (b) Not applicable. (c) 1. The stockholders approved an amendment to the Company's Restated Certificate of Incorporation increasing the number of authorized shares of the Company's Common Stock from 20,000,000 to 45,000,000. For: 8,146,028 Against: 1,099,338 Abstain: 79,398 --------- --------- ------- There were no ( 0 ) broker non-votes in connection with the --- approval of the amendment to the Company's Restated Certificate of Incorporation. Item 6. Exhibits and Reports on Form 8-K: (a) Exhibits The following exhibits are filed herewith: Exhibit No. Document ----------- -------- 3.1 Restated Certificate of Incorporation of the Company. 3.1.1 Certificate of Amendment dated February 29, 1996 to Restated Certificate of Incorporation of the Company. 10.1.4* Amendment No. 3 to the Company's Amended and Restated 1990 Stock Plan dated March 11, 1996 (previously filed under the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996). 10.13.2 Second Amendment to Lease dated January 24, 1996 (previously filed under the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996). 10.20 Agreement and Plan of Merger dated as of January 11, 1996 among Renal Treatment Centers, Inc., Renal Treatment Centers - Hawaii, Inc. and Intercontinental Medical Services, Inc. and Dudley S.J. Seto, M.D. (incorporated herein by reference to Exhibit No. 2.1 filed under the Company's Current Report on Form 8-K dated February 20, 1996). 10.21 Agreement and Plan of Merger dated as of February 29, 1996 among Renal Treatment Centers, Inc., Renal Treatment Centers - Oklahoma, Inc. and Western Oklahoma Kidney Center, L.L.C. and the individuals identified therein (incorporated herein by reference to Exhibit No.2.2 filed under the Company's Form S-3 Registration Statement No. 333-3716). 10.22 Agreement and Plan of Merger dated as of February 29, 1996 among Renal Treatment Centers, Inc., Renal Treatment Centers - Oklahoma, Inc., RTC Supply, Inc. and Midwest Dialysis, Inc. and its affiliates identified therein and the individuals and trusts identified therein (incorporated herein by reference to Exhibit No. 2.3 filed under the Company's Form S-3 Registration Statement No. 333-3716). Part II. Item 6(a) continued: 10.23 Agreement and Plan of Merger dated as of February 29, 1996 among Renal Treatment Centers, Inc., Renal Treatment Centers - Oklahoma, Inc. and Midwest Regional Dialysis, Inc. and its affiliates identified therein and the individuals and trusts identified therein (incorporated herein by reference to Exhibit No. 2.4 filed under the Company's Form S-3 Registration Statement No. 333-3716). 10.24 Agreement and Plan of Merger dated as of February 29, 1996 among Renal Treatment Centers, Inc., Renal Treatment Centers - Oklahoma, Inc. and Northwest Dialysis, Inc. and Lorraine T. Wilson, M.D. (incorporated herein by reference to Exhibit No. 2.5 filed under the Company's Form S-3 Registration Statement No. 333-3716). 11.1 Computation of Primary and Fully Diluted Earnings per Share. 27 Financial Data Schedule -------------- *Management contract or compensatory plan or arrangement (b) Reports on Form 8-K Form 8-K dated February 20, 1996 reporting the Agreement and Plan of Merger with Intercontinental Medical Services, Inc. under Item 2. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. RENAL TREATMENT CENTERS, INC. Date: June 6, 1996 By: /s/ Frederick C. Jansen -------------------------------- ---------------------------------- Frederick C. Jansen Executive Vice President and Chief Financial Officer Date: June 6, 1996 By: /s/ Ronald H. Rodgers, Jr. -------------------------------- ---------------------------------- Ronald H. Rodgers, Jr. Vice President - Finance and Chief Accounting Officer Renal Treatment Centers, Inc. and Subsidiaries Exhibit Index Located at Exhibit No. Description Page - ----------- ----------- ---- 3.1 Restated Certificate of Incorporation of the Company. 3.1.1 Certificate of Amendment dated February 29, 1996 to Restated Certificate of Incorporation of the Company. 10.1.4* Amendment No. 3 to the Company's Amended and Restated 1990 Stock Plan dated March 11, 1996 (previously filed under the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997). 10.13.2 Second Amendment to Lease dated January 24, 1996 (previously filed under the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997). 10.20 Agreement and Plan of Merger dated as of January 11, 1996 among Renal Treatment Centers, Inc., Renal Treatment Centers - Hawaii, Inc. and Intercontinental Medical Services, Inc. and Dudley S.J. Seto, M.D. (incorporated herein by reference to Exhibit No. 2.1 filed under the Company's Current Report on Form 8-K dated February 20, 1996). 10.21 Agreement and Plan of Merger dated as of January 29, 1996 among Renal Treatment Centers, Inc., Renal Treatment Centers - Oklahoma, Inc. and Western Oklahoma Kidney Center, L.L.C. and the individuals identified therein (incorporated herein by reference to Exhibit No. 2.2 filed under the Company's Form S-3 Registration Statement No. 333-3716). 10.22 Agreement and Plan of Merger dated as of February 29, 1996 among Renal Treatment Centers, Inc., Renal Treatment Centers - Oklahoma, Inc., RTC Supply, Inc. and Midwest Dialysis, Inc. and its affiliates identified therein and the individuals and trusts identified therein (incorporated herein by reference to Exhibit No. 2.3 filed under the Company's Form S-3 Registration Statement No. 333-3716). 10.23 Agreement and Plan of Merger dated as of February 29, 1996 among Renal Treatment Centers, Inc., Renal Treatment Centers - Oklahoma, Inc. and Midwest Regional Dialysis, Inc. and its affiliates identified therein and the individuals and trusts identified therein (incorporated herein by reference to Exhibit No. 2.4 filed under the Company's Form S-3 Registration Statement No. 333-3716). 10.24 Agreement and Plan of Merger dated as of February 29, 1996 among Renal Treatment Centers, Inc., Renal Treatment Centers - Oklahoma, Inc. and Northwest Dialysis, Inc. and Lorraine T. Wilson, M.D. (incorporated herein by reference to Exhibit No. 2.5 filed under the Company's Form S-3 Registration Statement No. 333-3716). 11.1 Computation of Primary and Fully Diluted Earnings per Share. 27 Financial Data Schedule. - ----------------------- * Management contract or compensatory plan or arrangement. EX-3.1 2 RESTATED CERTIFICATE OF INCORPORATION OF RENAL RESTATED CERTIFICATE OF INCORPORATION OF RENAL TREATMENT CENTERS, INC. Renal Treatment Centers, Inc. (the "Corporation"), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify as follows: 1. The name of the Corporation is Renal Treatment Centers, Inc. 2. The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware under the name Renal Treatment Centers, Inc. on August 11, 1988. 3. This Restated Certificate of Incorporation amends and restates the Restated Certificate of Incorporation of the Corporation. 4. This Restated Certificate of Incorporation was duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware. With respect to such adoption, written consent of the stockholders of the Corporation has been given in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware and written notice has been given as provided in Section 228. 5. The text of the Certificate of Incorporation of the Corporation is hereby amended and restated in full to read as follows: RESTATED CERTIFICATE OF INCORPORATION OF RENAL TREATMENT CENTERS, INC. FIRST: The name of the Corporation is RENAL TREATMENT CENTERS, INC. SECOND: The address of the Corporation's registered office in the State of Delaware is 32 Loockerman Square, Suite L-100, City of Dover, County of Kent. The name of its registered agent at such address is The Prentice-Hall Corporation System, Inc. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware. FOURTH: The total number of shares of all classes of stock which the Corporation shall have the authority to issue is 25,000,000 shares, consisting of 20,000,000 shares of Common Stock (the "Common Stock"), $.01 par value; and 5,000,000 shares of Series Preferred Stock (the "Series Preferred Stock"), $.01 par value. The designations, rights, including voting rights, preferences, qualifications, limitations and restrictions of the Series Preferred Stock, and particularly of the shares of each series thereof, may, to the extent permitted by law, be similar to or may differ from those of any other series. The Board of Directors of the Corporation is hereby expressly granted authority to issue from time to time Series Preferred Stock in one or more series and to fix from time to time before issuance thereof, by filing a certificate pursuant to the General Corporation Law of the State of Delaware, the number of shares in each series and all designations, relative rights (including the right to vote and, to the extent permitted by law, to convert into shares of any class or into any series of any class), preferences, qualifications, limitations and restrictions of the shares in each such series. FIFTH: In furtherance and not in limitation of the powers conferred by law, the Board of Directors is authorized to make, - 2 - alter or repeal the By-Laws of the Corporation. Election of directors need not be by written ballot. SIXTH: Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for the Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for the Corporation under the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three- fourths (3/4) in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, such compromise or arrangement and such reorganization shall, if sanctioned by the court to which the application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders of the Corporation, as the case may be, and also on the Corporation. SEVENTH: The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by paragraph (7) of subsection (b) of Section 102 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented. EIGHTH: Each person who is or was or had agreed to become a director or officer of the Corporation (and the heirs, executors, administrators or estate of such person) shall be indemnified by the Corporation to the fullest extent permitted by the General Corporation Law of the State of Delaware as presently or hereafter in effect. Without limiting the generality or effect of the foregoing, the Corporation may enter into one or more agreements with any person which provide for indemnification greater or - 3 - different than that provided in this Article. No amendment to or repeal of this Article EIGHTH shall apply to or have any effect on the right to indemnity permitted or authorized hereunder for or with respect to claims asserted before or after such amendment or repeal arising from acts or omissions occurring in whole or in part before the effective date of such amendment or repeal. NINTH: Any provisions contained in this Restated Certificate of Incorporation may be amended, altered, changed or repealed, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. IN WITNESS WHEREOF Renal Treatment Centers, Inc. has caused this certificate to be signed and attested by its duly authorized officers this 12th day of August, 1993. RENAL TREATMENT CENTERS, INC. By:/s/ Robert L. Mayer, Jr. ------------------------ President Attest: By:/s/ Frederick C. Jansen ----------------------- Secretary - 4 - EX-3.1.1 3 CERTIFICATE OF AMENDMENT DATED FEBRUARY 29, 1996 CERTIFICATE OF AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION OF RENAL TREATMENT CENTERS, INC. -------------------------------- Renal Treatment Centers, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, does hereby certify as follows: 1. The Board of Directors of Renal Treatment Centers, Inc. (the "Corporation"), at a meeting of the directors held on December 13, 1995, duly adopted a resolution setting forth a proposed amendment of the Restated Certificate of Incorporation of the Corporation, declaring said amendment to be advisable and calling a special meeting of the stockholders of the Corporation for consideration thereof by the stockholders of the Corporation. The proposed amendment is set forth on Exhibit A attached hereto. 2. Thereafter, on February 29, 1996, at the special meeting of the stockholders of the Corporation called and held upon notice duly given, the holders of a majority of the outstanding shares of Common Stock, $.01 par value, of the Corporation voted in favor of the amendment. 3. Such amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, Renal Treatment Centers, Inc. has caused this Certificate of Amendment to be signed and attested by its duly authorized officers, this 29th day of February, 1996. RENAL TREATMENT CENTERS, INC. ATTEST: /s/ Frederick C. Jansen By:/s/ Robert L. Mayer, Jr. - ----------------------- ------------------------ Frederick C. Jansen, Robert L. Mayer, Jr., Secretary President EXHIBIT A --------- Article FOURTH of the Restated Certificate of Incorporation of Renal Treatment Centers, Inc. is hereby amended so as to be restated in full as follows: "FOURTH: The total number of shares of all classes of stock which the Corporation shall have the authority to issue is 50,000,000 shares, consisting of 45,000,000 shares of Common Stock (the "Common Stock"), $.01 par value; and 5,000,000 shares of Series Preferred Stock (the "Series Preferred Stock"), $.01 par value. The designations, rights, including voting rights, preferences, qualifications, limitations and restrictions of the Series Preferred Stock, and particularly of the shares of each series thereof, may, to the extent permitted by law, be similar to or may differ from those of any other series. The Board of Directors of the Corporation is hereby expressly granted authority to issue from time to time Series Preferred Stock in one or more series and to fix from time to time before issuance thereof, by filing a certificate pursuant to the General Corporation Law of the State of Delaware, the number of shares in each series and all designations, relative rights (including the right to vote and, to the extent permitted by law, to convert into shares of any class or into any series of any class), preferences, qualifications, limitations and restrictions of the shares in each such series." EX-11.1 4 COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS Exhibit 11.1(a) Renal Treatment Centers, Inc. and Subsidiaries COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE for the quarter ended March 31, 1996
Three Months Ended March 31, 1996 Primary Fully Diluted - ---------------------------------------------------------------------------------------- Net income $3,158,054 $3,158,054 Add back interest on note, tax effected -- 67,665 - ---------------------------------------------------------------------------------------- Net income available to common stockholders $3,158,054 $3,225,719 ======================================================================================== Weighted average number of shares outstanding 23,554,165 23,554,165 Weighted average number of maximum shares subject to exercise under outstanding stock options 1,349,743 1,349,743 Weighted average shares assumed issued upon conversion of note -- 661,501 - ---------------------------------------------------------------------------------------- 24,903,908 25,565,409 Less treasury shares assumed purchased with proceeds from assumed exercise of outstanding common stock options 625,473 583,641 - ---------------------------------------------------------------------------------------- Weighted average number of common and common stock 24,278,435 24,981,768 equivalents outstanding ======================================================================================== Net income per common and common stock equivalent $0.13 $0.13 ========================================================================================
Exhibit 11.1 Renal Treatment Centers, Inc. and Subsidiaries COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE for the quarter ended March 31, 1995
Three Months Ended March 31, 1995 Primary Fully Diluted - ---------------------------------------------------------------------------------------- Net income $2,033,169 $2,033,169 Add back interest on note, tax effected -- 74,357 - ---------------------------------------------------------------------------------------- Net income available to common stockholders $2,033,169 $2,107,526 ======================================================================================== Weighted average number of shares outstanding 21,098,552 21,098,552 Weighted average number of maximum share subject to exercise under outstanding stock options 1,168,198 1,168,198 Weighted average shares assumed issued upon conversion of note -- 712,024 - ---------------------------------------------------------------------------------------- 22,266,750 22,978,774 Less treasury shares assumed purchased with proceeds from assumed exercise of outstanding common stock options 735,150 651,854 - ---------------------------------------------------------------------------------------- Weighted average number of common and common stock 21,531,600 22,326,920 equivalents outstanding ======================================================================================== Net income per common and common stock equivalent $0.09 $0.09 ========================================================================================
EX-27 5 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1995 JAN-01-1996 MAR-31-1996 2,657,638 0 59,590,971 3,500,000 3,522,878 64,707,071 39,206,150 14,253,577 177,464,455 20,995,092 0 0 0 236,191 115,729,832 177,464,455 0 49,204,164 0 23,706,233 1,708,247 1,535,944 665,808 3,158,054 1,990,207 3,158,054 0 0 0 3,158,054 .13 .13
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