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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarterly Period Ended March 31, 1999
OR
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 0-23165
RENEX CORP.
(Exact name of Registrant as specified in its charter)
Florida 65-0422087
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
201 Alhambra Circle, Suite 800
Coral Gables, Florida 33134
(Address of principal executive offices, including Zip Code)
Registrant's telephone number including area code: (305) 448-2044
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. [ X ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Title of Each Class Number of Shares Outstanding
May 10, 1999
Common Stock 6,977,466
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RENEX CORP.
QUARTERLY REPORT ON FORM 10-Q
FOR QUARTER ENDED MARCH 31, 1999
TABLE OF CONTENTS
Page
PART I--FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets
March 31, 1999 (unaudited) and December 31, 1998...................................... 1
Condensed Consolidated Statements of Operations (unaudited)
For the Three Months Ended March 31, 1999 and 1998.................................... 2
Condensed Consolidated Statements of Cash Flows (unaudited)
For the Three Months Ended March 31, 1999 and 1998.................................... 3
Notes to Unaudited Condensed Consolidated Financial Statements.......................... 4-5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................................... 6-10
PART II--OTHER INFORMATION
Item 1. Legal Proceedings....................................................................... 11
Item 2. Changes in Securities................................................................... 11
Item 3. Defaults Upon Senior Securities......................................................... 11
Item 4. Submission of Matters to a Vote of Securities Holders................................... 11
Item 5. Other Information....................................................................... 11
Item 6. Exhibits and Reports on Form 8-K........................................................ 11
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RENEX CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
1999 1998
---- ----
ASSETS
Current assets:
Cash and cash equivalents............................................ $ 9,664,000 $ 9,115,000
Accounts receivable, less allowance for doubtful accounts of
$1,582,000 and $1,793,000 at March 31, 1999 and
December 31, 1998, respectively.................................... 7,650,000 7,606,000
Inventories.......................................................... 640,000 578,000
Prepaids and other................................................... 584,000 551,000
--------------- ----------------
Total current assets............................................. 18,538,000 17,850,000
Fixed assets, net...................................................... 10,407,000 10,474,000
Intangible assets, net................................................. 8,122,000 7,914,000
Notes receivable from affiliates, interest rate at 8% ................. 85,000 85,000
Other assets........................................................... 365,000 564,000
--------------- ----------------
Total assets..................................................... $ 37,517,000 $ 36,887,000
=============== ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable..................................................... $ 1,704,000 $ 993,000
Accrued expenses and other........................................... 2,186,000 2,354,000
Due to third-parties ................................................ 4,803,000 4,249,000
Current portion of capital lease obligations......................... 699,000 685,000
--------------- ----------------
Total current liabilities........................................ 9,392,000 8,281,000
--------------- ----------------
Capital lease obligations, less current portion........................ 1,342,000 1,519,000
--------------- ----------------
Commitments
Shareholders' equity:
Common stock, $.001 par value, 30,000,000 shares authorized,
7,252,466 shares - 1999 and 7,422,966 shares - 1998, issued
and outstanding................................................... 7,000 7,000
Additional paid-in capital............................................. 31,886,000 32,645,000
Accumulated deficit.................................................... (5,110,000) (5,565,000)
--------------- ----------------
Total shareholders' equity....................................... 26,783,000 27,087,000
--------------- ----------------
Total liabilities and shareholders' equity....................... $ 37,517,000 $ 36,887,000
=============== ================
See accompanying notes to condensed consolidated financial statements.
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RENEX CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
MARCH 31,
--------------------------------
1999 1998
--------------- ---------------
Net revenues............................................. $ 10,702,000 $ 7,750,000
Operating expenses:
Facilities........................................... 8,089,000 5,849,000
General and administrative........................... 1,279,000 1,045,000
Provision for doubtful accounts...................... 192,000 251,000
Depreciation and amortization........................ 648,000 465,000
--------------- ---------------
10,208,000 7,610,000
--------------- ---------------
Operating income................................... 494,000 140,000
--------------- ---------------
Other income (expense):
Net interest income ................................. 23,000 197,000
Amortization of deferred financing costs............. (12,000) --
--------------- ---------------
Income before taxes...................................... 505,000 337,000
Income tax expense....................................... 50,000 17,000
--------------- ---------------
Net income ........................................ $ 455,000 $ 320,000
=============== ===============
BASIC EARNINGS PER SHARE
Net income .............................................. $ .06 $ .05
=============== ===============
Weighted average shares outstanding...................... 7,372,588 6,977,372
=============== ===============
DILUTED EARNINGS PER SHARE
Net income .............................................. $ .06 $ .05
=============== ===============
Weighted average shares outstanding...................... 7,430,162 7,050,387
=============== ===============
See accompanying notes to condensed consolidated financial statements.
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RENEX CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED
MARCH 31,
----------------------------------
1999 1998
--------------- ----------------
Cash Flows from Operating Activities:
Net income ...................................................... $ 455,000 $ 320,000
Adjustments to reconcile net income to net cash provided by
operating activities:
Provisions for doubtful accounts............................... 192,000 251,000
Depreciation and amortization.................................. 648,000 465,000
Amortization of deferred financing costs....................... 12,000 --
Changes in operating assets and liabilities:
Accounts receivable.......................................... (236,000) (1,136,000)
Inventories.................................................. (62,000) (74,000)
Prepaids and other .......................................... (33,000) (184,000)
Other assets................................................. 187,000 (78,000)
Accounts payable and accrued expenses........................ 549,000 (629,000)
Due to third-parties......................................... 554,000 1,429,000
--------------- ---------------
Net cash provided by operating activities.................... 2,266,000 364,000
--------------- ---------------
Cash Flows from Investing Activities:
Purchases of fixed assets........................................ (489,000) (900,000)
Sales of securities available for sale........................... -- 5,057,000
Purchase of business assets...................................... (300,000) (4,500,000)
--------------- ---------------
Net cash used for investing activities....................... (789,000) (343,000)
--------------- ---------------
Cash Flows from Financing Activities:
Payments on capital lease obligations............................ (163,000) (103,000)
Repayments of long-term debt..................................... -- (6,000)
Repurchase of common stock ...................................... (765,000) --
Expenditures associated with issuance of stock................... -- (18,000)
--------------- ---------------
Net cash used for financing activities....................... (928,000) (127,000)
--------------- ---------------
Net increase (decrease) in cash and cash equivalents............... 549,000 (106,000)
Cash and cash equivalents, beginning of period..................... 9,115,000 9,693,000
--------------- ---------------
Cash and cash equivalents, end of period........................... $ 9,664,000 $ 9,587,000
=============== ===============
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest........................................... $ 51,000 $ 136,000
=============== ===============
Cash paid for income tax......................................... $ 130,000 $ --
=============== ===============
See accompanying notes to condensed consolidated financial statements.
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RENEX CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(1) INTERIM FINANCIAL STATEMENTS:
In management's opinion, the accompanying unaudited condensed consolidated
financial statements contain all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly the financial position of the
Company as of March 31, 1999, and the results of its operations for the three
months ended March 31, 1999 and 1998.
The accompanying unaudited interim condensed consolidated financial
statements have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission for reporting on Form 10-Q. Pursuant to such
rules and regulations, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted.
The condensed consolidated financial statements have been prepared by the
Company in accordance with the accounting policies disclosed in the audited
consolidated financial statements contained in the Company's Form 10-K for the
year ended December 31, 1998 and should be read in conjunction with the
consolidated financial statements and notes included in that report.
(2) BUSINESS COMBINATIONS:
In March 1999, the Company paid $300,000 for the achievement of certain
earnout provisions based on profitability relating to the acquisition in
December 1997 of an acute dialysis and hemapheresis services company. Such
amount has been added to goodwill.
(3) EARNINGS PER SHARE:
Basic earnings per share is computed by dividing net income by the weighted
average number of common shares outstanding for the period. In the computation
of diluted earnings per share, the weighted average number of common shares
outstanding is adjusted for the effect of all dilutive potential common stock.
In computing diluted earnings per share, the Company has utilized the treasury
stock method.
A reconciliation of the numerator and the denominator of the basic and
diluted earnings per share computation for net income is as follows for the
three months ended March 31, 1999 and 1998:
THREE MONTHS ENDED MARCH 31, 1999
Net
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ------
BASIC EPS $ 455,000 7,372,588 $ .06
=======
Effect of Dilutive Securities:
Options and warrants -- 57,574
--------------- ---------------
DILUTED EPS $ 455,000 7,430,162 $ .06
=============== =============== =======
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THREE MONTHS ENDED MARCH 31, 1998
Net
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ------
BASIC EPS $ 320,000 6,977,372 $ .05
=======
Effect of Dilutive Securities:
Options and warrants -- 73,015
--------------- ---------------
DILUTED EPS $ 320,000 7,050,387 $ .05
=============== =============== =======
(4) COMPREHENSIVE INCOME:
In the first quarter of 1998, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income," which
establishes standards for reporting and display of comprehensive income and its
components. The Company's net income for the three months ended March 31, 1999
and 1998 equals comprehensive income for the same period.
(5) OPERATING SEGMENTS:
Effective December 31, 1998, the Company implemented SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information." SFAS No.
131 establishes standards for reporting information about a Company's operating
segments and related disclosures about its products, services, geographic areas
of operations and major customers. Renex currently operates under one segment.
The manner in which the Company has presented information throughout its
Condensed Consolidated Financial Statements and the accompanying Notes and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" is the way the Company's management views and analyzes the business
to make decisions about operating matters.
(6) SHARE REPURCHASE PROGRAM:
In November 1998, the Company's Board of Directors approved a share
repurchase program authorizing the Company to repurchase up to 500,000 shares of
common stock on the open market from time to time at prices acceptable to the
Company. Through March 31, 1999, the Company repurchased 170,500 shares of Renex
common stock at a cost of approximately $765,000. Under Florida law, repurchased
shares constitute authorized but unissued shares. See Note 8, Subsequent Events.
(7) RECLASSIFICATIONS:
Certain prior year amounts have been reclassified to conform to current year
presentation.
(8) SUBSEQUENT EVENTS:
In April 1999, the Company's Board of Directors authorized the repurchase of
up to an additional 500,000 shares of common stock bringing the total share
repurchase program to 1,000,000 shares. Subsequent to March 31, 1999, the
Company repurchased 275,000 shares of Renex common stock at a cost of
approximately $1.0 million. Cumulatively, the Company has repurchased 445,500
shares of Renex common stock at a cost of approximately $1.8 million.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
OVERVIEW
The Company, operating through its wholly-owned subsidiaries, is a high
quality provider of dialysis and ancillary services to patients with end-stage
renal disease ("ESRD"), as well as acute dialysis services to patients in
hospitals. Since inception, the Company has implemented an aggressive growth
strategy designed to build its presence in selected regional markets by
establishing local clusters of dialysis facilities through new facility ("DE
NOVO") development or the acquisition of existing facilities. To date, the
Company has grown primarily through DE NOVO development because the Company
believes such a strategy minimizes the initial capital outlay. However, DE NOVO
facilities achieve profitability only when they reach sufficient utilization,
which historically does not occur prior to twelve months following opening. The
Company has increased overall facility utilization from 41% at December 31, 1994
to 63% at March 31, 1999 primarily through marketing efforts directed at local
nephrologists, patients and managed care organizations.
As of March 31, 1999, the Company operated 20 outpatient dialysis
facilities, of which eleven were DE NOVO facilities opened between 1994 and
1998. In addition, from 1995 through 1998 the Company acquired via the purchase
of stock or assets, nine dialysis facilities. The Company also manages a home
hemodialysis program and provides acute dialysis and hemapheresis treatments to
18 hospitals through contractual arrangements with these hospitals.
RESULTS OF OPERATIONS
The following table sets forth certain income statement items expressed as a
percentage of net revenues for the three months ended March 31, 1999 and 1998:
THREE MONTHS ENDED
MARCH 31,
--------------------
1999 1998
------ ------
Net revenues 100.0% 100.0%
Facilities expenses 75.5 75.5
General and administrative 12.0 13.5
Provision for doubtful accounts 1.8 3.2
Depreciation and amortization 6.1 6.0
Operating income 4.6 1.8
Net interest income .2 2.5
Net income 4.3 4.1
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THREE MONTHS ENDED MARCH 31, 1999 AND 1998
NET REVENUES. Net revenues for the three months ended March 31, 1999 were
$10.7 million compared to $7.8 million for the same period in 1998, representing
an increase of 38.1%. The increase in net revenues of $2.9 million was primarily
attributable to the acquisition of four dialysis clinics in March 1998 which
contributed $1.2 million, $1.1 million from three facilities opened during 1998,
and $600,000 from the continued growth at existing facilities.
FACILITIES EXPENSES. Facilities expenses primarily consist of costs and
expenses specifically attributable to the operation of the dialysis facilities,
including operating and maintenance costs of such facilities and all labor,
supplies and service costs related to patient care. Facilities expenses for the
three months ended March 31, 1999 were $8.1 million compared to $5.8 million for
the same period in 1998, representing an increase of 38.3%. The increase in
facilities expenses was due to the greater number of facilities in operation in
1999. As a percentage of net revenues, facilities expenses were 75.5% for the
three months ended March 31, 1999 and 1998.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
consist of headquarter expenses including marketing, finance, operations
management, legal, quality assurance, information systems, billing and
collections and centralized accounting support. General and administrative
expenses for the three months ended March 31, 1999 were $1.3 million compared to
$1.0 million for the same period in 1998, representing an increase of 22.4%. The
increase in general and administrative expenses was primarily due to accruals
related to management incentive programs. As a percentage of net revenues,
general and administrative expenses decreased to 12.0% for the three months
ended March 31, 1999 from 13.5% for the same period in 1998. The decrease as a
percentage of net revenues was due to an increase in revenues that did not
require a corresponding increase in general and administrative expenses,
primarily personnel related expenses.
PROVISION FOR DOUBTFUL ACCOUNTS. The provision for doubtful accounts is a
function of patient payor mix, collection experience and other factors. It is
the Company's practice to reserve for doubtful accounts in the period in which
revenue is recognized based on management's estimate of the net collectibility
of accounts receivable. The provision for doubtful accounts for the three months
ended March 31, 1999 was $192,000 compared to $251,000 for the same period in
1998, representing a decrease of 23.5%. As a percentage of net revenues, the
provision for doubtful accounts decreased to 1.8% for the three months ended
March 31, 1999 from 3.2% for the same period in 1998. The decrease was primarily
due to an improvement in the aging of the accounts receivable as a result of
increased collections.
DEPRECIATION AND AMORTIZATION EXPENSES. Depreciation and amortization
expenses for the three months ended March 31, 1999 were $648,000 compared to
$465,000 for the same period in 1998, representing an increase of 39.4%. The
increase was primarily due to the acquisition of four dialysis clinics and the
opening of three facilities in 1998. As a percentage of net revenues,
depreciation and amortization expenses were comparably 6.1% and 6.0% for the
three months ended March 31, 1999 and 1998, respectively.
NET INTEREST INCOME. Net interest income for the three months ended March
31, 1999 was $23,000 compared to net interest income of $197,000 for the same
period in 1998, representing an income decrease of $174,000. The decrease was
primarily due to the sale of $5.1 million in securities available for sale
during March 1998 used to purchase four facilities.
NET INCOME. The Company had net income of $455,000 for the three months
ended March 31, 1999 compared to a net income of $320,000 for the same period in
1998, an income increase of $135,000.
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LIQUIDITY AND CAPITAL RESOURCES
The Company requires capital resources for maintenance, refurbishing and
expansion of existing facilities, acquisitions, DE NOVO facilities, working
capital and general corporate purposes. The Company intends to finance its
growth and working capital requirements, as well as purchases of additional
equipment and leasehold improvements, from cash on hand, cash generated from
operations and the Company's secured line of credit described below. As of March
31, 1999, the Company had working capital of approximately $9.1 million compared
to working capital of $9.6 million as of December 31, 1998. Cash and cash
equivalents totaled $9.7 million as of March 31, 1999, as compared to $9.1
million as of December 31, 1998.
Net cash provided by operating activities was $2.3 million and $364,000 for
the three months ended March 31, 1999 and 1998, respectively. Net cash provided
by operating activities consisted of the Company's net income, increased by
non-cash expenses such as depreciation, amortization and the provision for
doubtful accounts and adjusted by changes in components of working capital,
primarily accounts receivable, due to third-parties and accrued expenses.
The Company requires substantial working capital to cover the expenses and
initial losses of each DE NOVO facility. Once a DE NOVO facility is operational,
the Company is unable to bill for services until it receives a Medicare provider
number and the Medicare intermediary installs its electronic billing software at
the facility. For these reasons, there is generally a 90-day delay before the
Company will receive payment on its initial services at such facility. In
addition, the dialysis industry is characterized by long collection cycles
because Medicaid and private insurance carriers require substantial
documentation to support reimbursement claims and often take a substantial
amount of time to process claims. As a result, the Company requires significant
working capital to cover expenses during the collection process.
Net cash used for investing activities was $789,000 and $343,000 for the
three months ended March 31, 1999 and 1998, respectively. The cash used in 1999
consisted of $489,000 in purchases of fixed assets, along with a $300,000
payment for the achievement of certain earnout provisions. See Note 2, Business
Combinations, in the notes to condensed consolidated financial statements. The
cash used in 1998 related to the $4.5 million cash purchase of four facilities
in March 1998, along with $900,000 for purchases of fixed assets, offset by the
sale of $5.1 million in securities available for sale. Historically, the
Company's principal uses of cash in investing activities have been related to
purchases of new equipment and leasehold improvements for the Company's existing
facilities, the cost of development of additional facilities and acquisitions.
Currently, there is one DE NOVO facility under construction that is expected to
open during the fourth quarter of 1999. The Company estimates that the cash
outlay for construction of leasehold improvements and purchases of equipment for
this facility will be approximately $1.2 million.
Net cash used for financing activities for the three months ended March 31,
1999 was $928,000. This consisted of $765,000 used for the repurchase of the
Company's common stock and $163,000 of payments on capital lease obligations.
See Note 6, Share Repurchase Program, and Note 8, Subsequent Events, in the
notes to condensed consolidated financial statements. Net cash used for
financing activities for the three months ended March 31, 1998 was $127,000.
This consisted primarily of payments on capital lease obligations of $103,000.
The Company has a $15 million secured line of credit with a financial
institution (the "Line of Credit"). Borrowings under the Line of Credit are
based on cash flow measurements, and bear interest ranging from the lower of the
LIBOR rate, plus 2.25% up to 2.75%, or the prime rate minus .5% up to the prime
rate depending on the Company's leverage ratio. The Line of Credit will be
utilized primarily for acquisitions and also provides working capital advances
via sublimits up to $5 million. The Line of Credit contains certain financial
covenants as to minimum net worth, leverage, capitalization and cash flow ratios
along with restrictions on new indebtedness and payment of dividends. As of
March 31, 1999, the Company did not have any borrowings under the Line of
Credit.
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The Company's long-term capital requirements depend on numerous factors,
including the rate at which the Company develops or acquires new facilities. In
addition, the Company has various on-going needs for capital, including: (i)
working capital for operations (including financing receivables as previously
described); and (ii) routine capital expenditures for the maintenance of
facilities, such as equipment and leasehold improvements. In order to implement
the Company's long-term growth strategy, the Company anticipates that capital
requirements will increase substantially from historical levels.
The Company anticipates that the consideration to be paid for the
acquisition of new facilities will consist of cash, promissory notes, assumption
of liabilities and/or the issuance of common stock or securities convertible
into common stock. Currently, the Company does not have any agreements,
commitments or understandings regarding the acquisition of any facilities. The
Company believes that cash on hand, together with the Line of Credit, will be
sufficient to fund the Company's operations and to finance the Company's growth
strategy through the next 12 months. However, there can be no assurance that the
Company will not require substantial additional funds prior to such time.
INCOME TAX LOSS CARRYFORWARDS
As of March 31, 1999, the Company had approximately $3.6 million of net
operating loss carryforwards that may be available to offset future taxable
income for federal income tax purposes. These net operating loss carryforwards
begin to expire in 2008.
POTENTIAL IMPACT OF INFLATION
A majority of the Company's net 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 Congressional budget limitations, inflation, consumer
price indexes and costs incurred in rendering the services. Historically,
adjustments to reimbursement rates have had little relation to the actual cost
of doing business.
The Company is not able to increase the amounts it bills for services
provided by its operations that are subject to Medicare and Medicaid
reimbursement rates. Operating costs, such as labor and supply costs, are
subject to inflation without corresponding increases in reimbursement rates.
Such increases may be significant and, as such, have a material adverse effect
on the Company's results of operations.
YEAR 2000
In February 1998, the Company formed a committee to evaluate and develop an
action plan for computer systems issues related to the Year 2000 ("Y2K"). The
committee has evaluated Y2K issues related to third party internal systems used
by the Company. This committee is also evaluating the impact of Y2K issues on
the Company's payors and operating vendors to determine their current status and
plan of action for Y2K readiness.
The Company recognizes its reliance on third parties for its operating and
financial computer output and processing. Based upon ongoing assessments, it
appears that the Company's existing internal software is either Y2K compliant or
that third parties are finalizing minor systems modifications to ensure Y2K
readiness. Testing, modifications and conversions of these third parties'
software are expected to be completed by June 1999. Presently, the Company's
management does not foresee any significant costs related to these potential
modifications and conversions.
The Company has formally communicated with its significant payors and
vendors and has requested a written statement regarding their Y2K readiness and
proof of their Y2K testing by the second quarter of 1999. In the event that a
vendor fails to respond to the Company's request, the Company will then contact
alternative vendors who appear to have greater Y2K readiness to provide the
Company with the same or similar supplies, equipment or services. The Company's
Medicare intermediary, which provides approximately 50% of the Company's cash
receipts, has informed the Company that it is Y2K compliant. However, the
Company has received limited communication regarding Y2K readiness from most of
the
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state Medicaid payors and several commercial payors. The Company will continue
to actively seek sufficient information from these various payors to determine
what impact any payors may have on the Company's cash flow. The failure of any
of the Company's significant payors or operating vendors to be Y2K compliant
could have a material adverse impact on the operations of the Company.
SHARE REPURCHASE PROGRAM
In November 1998, the Company's Board of Directors approved a share
repurchase program authorizing the Company to repurchase up to 500,000 shares of
common stock on the open market from time to time at prices acceptable to the
Company. In April 1999, the Company's Board of Directors authorized the
repurchase of up to an additional 500,000 shares of common stock bringing the
total share repurchase program to 1,000,000 shares. As of May 10, 1999, 445,500
shares have been repurchased at a cost of approximately $1.8 million.
IMPORTANT FACTORS RELATING TO FORWARD LOOKING STATEMENTS
This Form 10-Q contains certain forward looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 with respect to
the financial condition, results of operations and business of Renex Corp. and
its subsidiaries, including statements under Management's Discussion and
Analysis of Financial Condition and Results of Operations. These forward looking
statements involve certain risks and uncertainties. No assurance can be given
that any of such matters will be realized. Factors that may cause actual results
to differ materially for those contemplated by such forward looking statements
include, among others, the following: (i) the success of initiatives undertaken
by Renex Corp. to increase its revenues and improve its profitability; (ii)
competitive pressure in the industry; and (iii) general economic conditions.
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PART II--OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits furnished as part of the Report:
27 Financial Data Schedule (for SEC use only)
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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.
RENEX CORP.
(Registrant)
By: /s/ James P. Shea
---------------------------------
James P. Shea
President and Chief Executive Officer
By: /s/ Orestes L. Lugo
---------------------------------
Orestes L. Lugo
Date: May 10, 1999 Senior Vice President--Finance and Chief
------------ Financial Officer
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