| Renex Corp. | |||
| Ticker: | RENX | 2100 Ponce de Leon Boulevard, Suite 950 | |
| Exchange: | NASDAQ-National Market | Coral Gables, FL 33134 | |
| Industry: | Service (SIC Code 8092) | (305) 448-2044 | |
| # of Employees: | 225 | ||
| Type of Shares: | Common Shares | Filing Date: | 8/1/97 | |
| U.S. Shares: | 3,000,000 | Offer Date: | 10/7/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $7.00 - $9.00 | |
| Primary Shares: | 3,000,000 | Offer Price: | $8.00 | |
| Secondary Shares: | 0 | Gross Spread: | $0.56 | |
| Offering Amount: | $24,000,000 | Selling: | $0.32 | |
| Expenses: | - | Reallowance: | $0.10 | |
| Shares Out After: | 6,974,247 |
| Manager | Tier | Phone |
| Vector Securities International, Inc. | Lead Manager | (800) 546-1231 |
| Needham & Company | Co-manager | (212) 705-0344 |
| Issuer's Law Firm: | Wallace, Bauman, Fodiman & Shannon, P.A. |
| Bank's Law Firm: | Skadden, Arps, Slate, Meagher & Flom |
| Auditor: | Ernst & Young |
| Registrar/Transfer Agent: | Continental Stock Transfer & Trust Co |
Dollar amounts in U.S. millions except for per share data | |||||
| 3 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 3/31/97 | 3/31/96 | 3/31/97 | ||
| Revenue: | $18.57 | $6.01 | $3.88 | Assets: | $16.09 |
| Net Income: | -$2.45 | -$0.31 | -$0.38 | Curr Assets: | $6.85 |
| EPS: | -$0.66 | -$0.08 | -$0.11 | Liabilities: | $12.07 |
| Prior EPS: | -$0.40 | -$0.09 | -$641.00 | Curr Liabilities: | $4.14 |
| Cash Flow/Oper: | -$0.96 | -$0.16 | -$0.03 | Equity: | $4.01 |
| Cash Flow/Fin: | $2.29 | -$0.18 | -$0.01 | Cash: | $0.52 |
| Cash Flow/Inv: | -$1.62 | -$0.18 | Working Cap: | $2.71 | |
| Business Description |
| The company is a high quality provider of dialysis and ancillary services to patients suffering from chronic kidney failure, generally referred to as end stage renal disease. The Company has grown primarily through the development of new facilities ("de novo" development) and more recently through acquisitions, and seeks to distinguish itself on the basis of quality patient care and responsiveness to the professional needs of its referring nephrologists. The Company currently provides dialysis services to approximately 800 patients in seven states, through 12 outpatient dialysis facilities and two staff assisted home dialysis programs. Additionally, the Company provides inpatient dialysis services at four hospitals. The Company intends to accelerate the penetration of its existing markets through a combination of acquisitions and de novo development and to enter new markets, primarily through acquisitions, in which the Company believes it can establish significant market share over time. To date, the Company has achieved significant growth in net revenues, from $2.7 million in 1994 to $18.6 million in 1996 and $6.0 million for the three months ended March 31, 1997. |
| Competition |
| The dialysis industry is fragmented and highly competitive, particularly with respect to the acquisition of existing dialysis facilities. Competition for qualified nephrologists to act as medical directors is also intense. According to HCFA, as of December 31, 1995, there were in excess of 2,800 dialysis facilities in the United States. According to industry estimates, as of May 31, 1997, 52% of all ESRD patients were treated by the six largest outpatient dialysis providers. The largest multi-facility provider is Fresenius Medical Care AG. Other large publicly owned dialysis companies include Gambro Health Care Patient Services, Inc. (a subsidiary of Incentive AB), Renal Treatment Centers, Inc., Total Renal Care, Inc. and Renal Care Group, Inc. An additional multi-facility provider, Dialysis Clinics, Inc., is a not-for-profit entity. Many of the Company's competitors have substantially greater financial resources than the Company and may compete with the Company for acquisitions, development and/or management of dialysis facilities. The Company may also experience competition from facilities established by former medical directors or other referring physicians. In addition, there are also a number of health care providers that have substantially greater financial resources than the Company who may decide to enter the dialysis industry. The Company believes that competition for acquisitions increases the cost of acquiring dialysis facilities and there can be no assurance that the Company will be able to compete effectively with such competitors either for acquisitions or generally. The Company believes that other important competitive factors in the dialysis industry are the development of relationships with physicians, quality of patient care and service and location and convenience of facilities. |
| Business Plan |
| The company's goal is to continue expanding its geographic coverage and market penetration while maintaining high quality patient care and physician satisfaction with its services. The company intends to enter new markets primarily through acquisitions and to penetrate existing markets primarily through de novo development, same facility growth and the establishment of alliances with hospitals an dmanaged care organizations. The key elements of the company's strategy include the following: (I) Create and Expand Regional Networks, (ii) Acquisitions, (iii) De Novo Development, (iv) Same-Facility Growth, (v) Establish Alliances with Hospitals and Managed Care Organizations and (vi) Capitalize on Relationships with Nephrologists. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used for repayment of indebtedness, including redemption of a warrant issued in connection with a portion of such indebtedness; capital expenditures associated with facilities under development; acquisitions; de novo facility development; and working capital and other general corporate purposes. |
| Name of Shareholder | % Owned Before | % Owned After |
| Arthur G. Shapiro, M.D. | 19.14% | 10.95% |
| Milton J. Wallace | 18.47% | 10.57% |
| James P. Shea | 5.15% | 2.96% |
| Officer Name | Title | Age |
| Milton J. Wallace | Chairman of the Board | 61 |
| Mark D. Wallace | Director, Secretary | 29 |
| James P. Shea | President, Chief Executive Officer, Director | 56 |
| Arthure G. Shapiro, M.D. | Vice Chairman of the Board, Director of Medical Affairs | 58 |
| Jeffrey C. Finch | Vice President | 36 |
| Patsy L. Anders | Vice President -- Business Development | 53 |
| Orestes L. Lugo | Vice President -- Finance, Chief Financial Officer | 38 |
| Mignon B. Early | Vice President -- Operations | 34 |