SEC Company Response from ALLIANCE IMAGING — May 4, 2005
ALLIANCE IMAGING INC /DE/ (CIK 0000817135)
Date: May 4, 2005 · CIK: 0000817135 · Accession: 0001104659-05-020378
AI Filing Summary & Sentiment
File numbers found in text: 001-16609
Referenced dates: April 25, 2005
Letter
Division of Corporation Finance Securities and Exchange Commission Washington, D.C. 20549 Re: Alliance Imaging, Inc. Forms 8-K dated March 7, 2005 File No. 001-16609
Dear Mr. Rosenberg:
We are writing on behalf of our client, Alliance Imaging, Inc., in response to the letter of the staff of the Division of Corporation Finance (the “Staff”), dated April 25, 2005, relating to the above-referenced filings.
Form 8-K Dated March 7, 2005
We have read your April 15, 2005 response to comment 5 of our March 28, 2005 letter. We believe that for the non-GAAP measures to be useful to investors, additional disclosures are necessary. You state that non-GAAP measures are useful because they are a benchmark for measuring operating performance, your ability to satisfy debt service, capital expenditures and working capital requirements and because certain covenants in your debt service are based on similar measures. For each non-GAAP measure, disclose what it means to be a “benchmark” for measuring operating performance and an “ability to satisfy” debt service, capital expenditures and working capital requirements as these terms are vague. Provide expanded disclosure to put each amount into context and explain what each amount means in terms of being a “benchmark” and “ability to satisfy.” In this regard, it may be necessary to also explain the rationale for and limitation of each adjustment to the comparable GAAP amount. We also refer you to our FAQ on non-GAAP disclosures that may be found on website at bttp://www.scc.gov/ciivisions/corpfinlfacis/nongaapfag.htm in particular answers to questions 8 and 9 for our views and suggested disclosures. Without this additional disclosure, we are not able to understand how the non-GAAP information is useful to an investor. With respect to the debt service covenants, disclose the covenant requirements and their relevance so that an investor may compare the non-GAAP measure to the covenant requirement which will improve the usefulness of the measures to an investor. Also with respect to the debt service covenant non-GAAP
disclosures, clarify what you mean by “similar measures,” reconcile the differences between “similar measures” and the covenant requirement and explain why the “similar measures” are more useful to an investor than the measure computed based on the covenant requirement.
Response: In response to the Staff’s comment and pursuant to conversations with you and Ms. Allen on May 2, 2005 and with Ms. Allen on May 3, 2005, the company has asked us to advise the Staff that in future earnings releases, it will not include the adjusted earnings (loss) per share and free cash flow non-GAAP financials measures included in the earnings release in the above-referenced Form 8-K. If the company includes the Adjusted EBITDA non-GAAP financial measure that was included in the company’s earnings release issued on May 2, 2005, the only purpose that the company will give will be that the company uses the measure in various covenants in its amended credit facility, as described in the company’s May 2nd earnings release. The company will also include the applicable debt covenant formulae and will include actual ratio results for the period covered by the earnings release.
Very truly
yours,
/s/ Nicholas O’Keefe
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CORRESP 1 filename1.htm 135 Commonwealth Drive Menlo Park, California 94025 Tel: (650) 328-4600 Fax: (650) 463-2600 www.lw.com FIRM / AFFILIATE OFFICES Boston New York Brussels Northern Virginia Chicago Orange County Frankfurt Paris Hamburg San Diego Hong Kong San Francisco London Shanghai Los Angeles Silicon Valley May 4, 2005 Milan Singapore Moscow Tokyo CONFIDENTIAL New Jersey Washington, D.C. Jim B. Rosenberg File No. 028543-0028 Senior Assistant Chief Accountant Division of Corporation Finance Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: Alliance Imaging, Inc. Forms 8-K dated March 7, 2005 File No. 001-16609 Dear Mr. Rosenberg: We are writing on behalf of our client, Alliance Imaging, Inc., in response to the letter of the staff of the Division of Corporation Finance (the “Staff”), dated April 25, 2005, relating to the above-referenced filings. Form 8-K Dated March 7, 2005 We have read your April 15, 2005 response to comment 5 of our March 28, 2005 letter. We believe that for the non-GAAP measures to be useful to investors, additional disclosures are necessary. You state that non-GAAP measures are useful because they are a benchmark for measuring operating performance, your ability to satisfy debt service, capital expenditures and working capital requirements and because certain covenants in your debt service are based on similar measures. For each non-GAAP measure, disclose what it means to be a “benchmark” for measuring operating performance and an “ability to satisfy” debt service, capital expenditures and working capital requirements as these terms are vague. Provide expanded disclosure to put each amount into context and explain what each amount means in terms of being a “benchmark” and “ability to satisfy.” In this regard, it may be necessary to also explain the rationale for and limitation of each adjustment to the comparable GAAP amount. We also refer you to our FAQ on non-GAAP disclosures that may be found on website at bttp://www.scc.gov/ciivisions/corpfinlfacis/nongaapfag.htm in particular answers to questions 8 and 9 for our views and suggested disclosures. Without this additional disclosure, we are not able to understand how the non-GAAP information is useful to an investor. With respect to the debt service covenants, disclose the covenant requirements and their relevance so that an investor may compare the non-GAAP measure to the covenant requirement which will improve the usefulness of the measures to an investor. Also with respect to the debt service covenant non-GAAP disclosures, clarify what you mean by “similar measures,” reconcile the differences between “similar measures” and the covenant requirement and explain why the “similar measures” are more useful to an investor than the measure computed based on the covenant requirement. Response: In response to the Staff’s comment and pursuant to conversations with you and Ms. Allen on May 2, 2005 and with Ms. Allen on May 3, 2005, the company has asked us to advise the Staff that in future earnings releases, it will not include the adjusted earnings (loss) per share and free cash flow non-GAAP financials measures included in the earnings release in the above-referenced Form 8-K. If the company includes the Adjusted EBITDA non-GAAP financial measure that was included in the company’s earnings release issued on May 2, 2005, the only purpose that the company will give will be that the company uses the measure in various covenants in its amended credit facility, as described in the company’s May 2nd earnings release. The company will also include the applicable debt covenant formulae and will include actual ratio results for the period covered by the earnings release. Very truly yours, /s/ Nicholas O’Keefe Nicholas O’Keefe of LATHAM & WATKINS LLP cc: Christine Allen Jeffrey Riedler Song P. Brandon, Esq. (Securities and Exchange Commission) Russell D. Phillips, Jr. (Alliance Imaging, Inc.) 2