Alliance Imaging announces completion of additional refinancing transactions: will report substantial nonrecurring earnings.ORANGE, Calif.--(BUSINESS WIRE)--Jan. 8, 1997--Alliance Imaging Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :SCAN) Wednesday announced the completion of additional refinancing transactions that significantly improve the company's balance sheet and enhance its ability to take advantages of opportunities in the rapidly changing diagnostic imaging services marketplace. As previously announced, the company repurchased all of its 7.5 percent senior subordinated debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before and Series A 6 percent cumulative preferred stock Cumulative preferred stock Preferred stock whose dividends accrue, should the issuer not make timely dividend payments. Related: Non-cumulative preferred stock. . The securities retired, carried on Alliance's balance sheet at an aggregate of $31.6 million, were repurchased for $16.8 million plus accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. and dividends, in cash. In addition to earnings from operations and gains from previously announced transactions, as a result of this transaction, the company will report nonrecurring earnings of approximately 55 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. in the fourth quarter of 1996 and additional nonrecurring earnings in the first quarter of 1997. In total, the repurchase will result in an increase in stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. totaling approximately $9.6 million. Significantly, the retirement of these securities will enhance Alliance's operating flexibility and its ability to take advantage of opportunities in the marketplace. Although a national leader in diagnostic imaging since 1983, Alliance's ability to take advantage of attractive opportunities has been constrained in recent years by restrictive covenants Restrictive covenants Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends. contained in its senior subordinated debentures. With those securities retired, Alliance's ability to grow and enter into advantageous transactions has been enhanced. "The demand for the outsourced radiology services and high technology diagnostic imaging systems, as well as the related management and information services See Information Systems. provided by Alliance, is we believe, growing, but the economics and complexity of the current health care marketplace are creating pressures toward consolidation of service providers," explained Alliance chairman, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Richard N. Zehner. "These additional refinancing transactions will enhance our ability to take advantage of consolidation opportunities, as well as our ability to grow internally." Funds for the refinancing were generated in a concurrent bridge loan transaction in which Alliance borrowed $18 million. The bridge loan is convertible into a new Series D 4 percent preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. of Alliance that itself is convertible into Alliance common stock at $6.00 per share, subject to adjustment. If the bridge loan is converted into Series D preferred, Alliance has also agreed to make up to another $9 million of indebtedness held by the same lender convertible into a new Series E 4 percent preferred stock. The Series E preferred stock would be convertible into common stock at the greater of $6.00 per share or the market value of the common stock at the time of the issuance of the Series E preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. , subject to adjustment. While there can be no assurance that the bridge loan will be converted into Series D preferred stock, the company currently anticipates that conversion will occur in the first quarter of 1997. If the bridge loan is not converted, it is likely that Alliance would be required to raise new funds from an outside party to refinance the bridge loan. While the company believes that it could raise such funds, there can be no assurance as to the availability or the terms of such financing. Zehner noted that upon the expected conversion of the bridge loan into Series D preferred stock, as a result of transactions in the fourth quarter of 1996 and first quarter of 1997, and through the conversion, the company will have reduced the company's long term debt by $21.4 million, substantially increased stockholders' equity and significantly improved the company's debt to capitalization ratio. He reiterated that the stronger balance sheet should aid the company in capitalizing on potential acquisitions and other opportunities in the marketplace. Alliance Imaging is the leading provider of outsourced radiology services and high technology diagnostic imaging systems, as well as related management and information services, to hospitals and other health care providers nationwide. CONTACT: Alliance Imaging Inc., Orange Terrence M. White, 714/921-5656 www.allianceimaging.com or Financial Relations Board Karen Taylor Karen Taylor is an English comedienne from Barrow-in-Furness, Cumbria. She is a former finalist in the prestigious Daily Telegraph Open Mic Award[1] and has fronted her own sketch show on BBC Three, entitled Touch Me, I'm Karen Taylor. , 310/442-0599 |
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