UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended June 30, 2004
| ¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from
Commission File No. 0-23311
RADIOLOGIX, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 75-2648089 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
3600 JP Morgan Chase Tower
2200 Ross Avenue
Dallas, Texas 75201-2776
(Address of principal executive offices, including zip code)
(214) 303-2776
(Registrant’s telephone number, including area code)
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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). 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 July 31, 2004 | |
| Common Stock, $0.0001 par value | 21,799,735 shares |
FORM 10-Q
INDEX
RADIOLOGIX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
| June 30, 2004 |
December 31, 2003 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: |
||||||||
| Cash and cash equivalents |
$ | 47,079 | $ | 36,766 | ||||
| Restricted cash |
4,000 | — | ||||||
| Accounts receivable, net of allowances |
60,785 | 58,746 | ||||||
| Due from affiliates |
2,241 | 4,104 | ||||||
| Assets held for sale |
1,094 | 251 | ||||||
| Other current assets |
7,733 | 7,571 | ||||||
| Total current assets |
122,932 | 107,438 | ||||||
| PROPERTY AND EQUIPMENT, net |
58,683 | 62,655 | ||||||
| INVESTMENTS IN JOINT VENTURES |
7,920 | 10,665 | ||||||
| GOODWILL |
3,651 | 20,110 | ||||||
| INTANGIBLE ASSETS, net |
65,685 | 67,917 | ||||||
| DEFERRED FINANCING COSTS, net |
7,341 | 8,151 | ||||||
| OTHER ASSETS |
1,663 | 2,200 | ||||||
| Total assets |
$ | 267,875 | $ | 279,136 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: |
||||||||
| Accounts payable and accrued expenses |
$ | 13,771 | $ | 14,598 | ||||
| Accrued physician retention |
9,442 | 8,821 | ||||||
| Accrued salaries and benefits |
8,767 | 7,788 | ||||||
| Current portion of long-term debt |
243 | 261 | ||||||
| Current portion of capital lease obligations |
401 | 1,438 | ||||||
| Other current liabilities |
420 | 482 | ||||||
| Total current liabilities |
33,044 | 33,388 | ||||||
| DEFERRED INCOME TAXES |
328 | 4,260 | ||||||
| LONG-TERM DEBT, net of current portion |
158,270 | 160,000 | ||||||
| CONVERTIBLE DEBT |
11,980 | 11,980 | ||||||
| CAPITAL LEASE OBLIGATIONS, net of current portion |
132 | 376 | ||||||
| DEFERRED REVENUE |
7,107 | 7,312 | ||||||
| OTHER LIABILITIES |
266 | 319 | ||||||
| Total liabilities |
211,127 | 217,635 | ||||||
| COMMITMENTS AND CONTINGENCIES |
||||||||
| MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES |
784 | 817 | ||||||
| STOCKHOLDERS’ EQUITY: |
||||||||
| Preferred stock, $.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding |
— | — | ||||||
| Common stock, $.0001 par value; 50,000,000 shares authorized; 21,813,419 and 21,765,985 shares issued in 2004 and 2003, respectively, and 21,794,735 and 21,747,301 outstanding in 2004 and 2003, respectively |
2 | 2 | ||||||
| Treasury stock |
(180 | ) | (180 | ) | ||||
| Additional paid-in capital |
14,038 | 13,942 | ||||||
| Retained earnings |
42,104 | 46,920 | ||||||
| Total stockholders’ equity |
55,964 | 60,684 | ||||||
| Total liabilities and stockholders’ equity |
$ | 267,875 | $ | 279,136 | ||||
See accompanying notes to consolidated financial statements.
1
RADIOLOGIX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
| For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| SERVICE FEE REVENUE |
$ | 67,682 | $ | 62,041 | $ | 135,297 | $ | 123,467 | ||||||||
| COSTS AND EXPENSES: |
||||||||||||||||
| Salaries and benefits |
21,798 | 19,836 | 45,158 | 40,261 | ||||||||||||
| Field supplies |
4,261 | 4,376 | 8,440 | 8,331 | ||||||||||||
| Field rent and lease expense |
8,444 | 7,610 | 16,553 | 15,165 | ||||||||||||
| Other field expenses |
11,461 | 10,420 | 22,387 | 20,392 | ||||||||||||
| Bad debt expense |
5,553 | 5,312 | 11,249 | 10,573 | ||||||||||||
| Severance and other related costs |
— | 311 | — | 1,280 | ||||||||||||
| Corporate general and administrative |
4,284 | 3,375 | 7,896 | 7,016 | ||||||||||||
| Impairment of goodwill and long-lived assets |
9,154 | — | 12,383 | — | ||||||||||||
| Depreciation and amortization |
6,424 | 6,606 | 13,136 | 13,184 | ||||||||||||
| Gain on sale of operations |
(4,669 | ) | — | (4,669 | ) | — | ||||||||||
| Interest expense, net |
4,307 | 4,494 | 8,691 | 9,134 | ||||||||||||
| Total costs and expenses |
71,017 | 62,340 | 141,224 | 125,336 | ||||||||||||
| LOSS BEFORE EQUITY IN EARNINGS OF |
||||||||||||||||
| INVESTMENTS, MINORITY INTERESTS IN |
||||||||||||||||
| CONSOLIDATED SUBSIDIARIES, INCOME TAXES |
||||||||||||||||
| AND DISCONTINUED OPERATIONS |
(3,335 | ) | (299 | ) | (5,927 | ) | (1,869 | ) | ||||||||
| Equity In Earnings of Investments |
758 | 1,314 | 1,354 | 2,512 | ||||||||||||
| Minority Interests In Income of Consolidated Subsidiaries |
(189 | ) | (331 | ) | (444 | ) | (530 | ) | ||||||||
| INCOME (LOSS) BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS |
(2,766 | ) | 684 | (5,017 | ) | 113 | ||||||||||
| Income Tax Expense (Benefit) |
(1,387 | ) | 273 | (2,287 | ) | 45 | ||||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS |
(1,379 | ) | 411 | (2,730 | ) | 68 | ||||||||||
| Discontinued Operations: |
||||||||||||||||
| Loss from discontinued operations before income taxes |
(1,216 | ) | (225 | ) | (3,477 | ) | (7,337 | ) | ||||||||
| Income tax benefit |
(486 | ) | (90 | ) | (1,391 | ) | (2,935 | ) | ||||||||
| Loss from discontinued operations |
(730 | ) | (135 | ) | (2,086 | ) | (4,402 | ) | ||||||||
| NET INCOME (LOSS) |
$ | (2,109 | ) | $ | 276 | $ | (4,816 | ) | $ | (4,334 | ) | |||||
| INCOME (LOSS) PER COMMON SHARE |
||||||||||||||||
| Income (loss) from continuing operations—basic |
$ | (0.06 | ) | $ | 0.02 | $ | (0.13 | ) | $ | 0.00 | ||||||
| Income (loss) from discontinued operations—basic |
(0.04 | ) | (0.01 | ) | (0.09 | ) | (0.20 | ) | ||||||||
| Net income (loss)—basic |
$ | (0.10 | ) | $ | 0.01 | $ | (0.22 | ) | $ | (0.20 | ) | |||||
| Income (loss) from continuing operations—diluted |
$ | (0.06 | ) | $ | 0.02 | $ | (0.13 | ) | $ | 0.00 | ||||||
| Income (loss) from discontinued operations—diluted |
(0.04 | ) | 0.00 | (0.09 | ) | (0.20 | ) | |||||||||
| Net income (loss)—diluted |
$ | (0.10 | ) | $ | 0.02 | $ | (0.22 | ) | $ | (0.20 | ) | |||||
| WEIGHTED AVERAGE SHARES OUTSTANDING |
||||||||||||||||
| Basic |
21,769,804 | 21,695,140 | 21,767,894 | 21,695,140 | ||||||||||||
| Diluted |
21,769,804 | 23,416,435 | 21,767,894 | 21,768,428 | ||||||||||||
See accompanying notes to unaudited consolidated financial statements
2
RADIOLOGIX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| For the Six Months Ended June 30, |
||||||||
| 2004 |
2003 |
|||||||
| (Unaudited) | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net loss |
$ | (4,816 | ) | $ | (4,334 | ) | ||