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CdA Radiology Firm Plans to Go Public

Posted on: Thursday, 6 October 2005, 18:00 CDT

By Becky Kramer, The Spokesman-Review, Spokane, Wash.

Oct. 6--COEUR d'ALENE -- NightHawk Radiology is going public.

The 4-year-old company uses doctors in Australia and Switzerland to provide nighttime evaluations of X-ray and CT scan images for emergency rooms in U.S. hospitals. NightHawk wants to become a Nasdaq-traded company, so it can tap into public equity markets and continue its rapid growth, company officials said in documents filed Wednesday with the U.S. Securities and Exchange Commission.

The company plans to raise up to $86.3 million through an initial public offering, according to a registration statement filed Wednesday. The money would be used to pay off $32 million in company debt and finance future growth. Neither the price of the stock, nor the number of shares that will be sold, has been determined.

NightHawk was founded by Dr. Paul Berger, a Coeur d'Alene radiologist.

Berger and his partners noticed the growing demand for after-hours radiologists. Emergency physicians were increasing their use of diagnostic imaging tools such as X-rays, CT scans and magnetic resonance imaging, or MRIs. But they needed radiologists to read the images.

Instead of a night shift, Berger and his partners figured another time zone was the answer. They opened an office in Sydney, Australia, and later one in Zurich, Switzerland. The radiologists in those offices -- all board-certified in the U.S. -- work during the day, receiving images from the dark side of the globe via high-speed transmission lines.

The company took its name from Marine helicopter pilots who fly at night -- NightHawks. It has applied to trade under the Nasdaq symbol, "NHWK."

NightHawk's services are used at about 12 percent of the nation's hospitals, according to company figures. Sales have grown from $4.7 million in 2002 to $39.3 million last year.

The use of diagnostic imaging testing is on a rapid upswing, NightHawk officials said in the documents filed with the SEC. CT scans, which use specialized equipment to create cross-sectional views of inner anatomy, have increased by 14 percent each year since 2001. The use of MRIs is up 13 percent.

NightHawk has 130 full-time employees, including 70 in Coeur d'Alene. The company recently purchased a Virginia firm, American Teleradiology NightHawks, and could pursue other acquisitions with proceeds from the public offering, according to documents.

Wednesday's filing triggers a review by the Securities and Exchange Commission, which can last for several months. As a result, NightHawk officials don't have a date for the stock sale at this point, said Paul Cartee, the company's vice president and general counsel.

Cartee said he could not discuss the filing, due to a "quiet period" imposed by securities regulations.

Berger, 63, remains with NightHawk as president and chief executive officer of the company. Last year, he earned $609,000 in salary, plus a $600,000 bonus and $345,700 in other compensation, according to company filings.

Berger currently owns about 31 percent of NightHawk's 30 million shares of outstanding stock. His son, Jon Berger, vice president of sales and marketing, is also a large shareholder, with 13 percent of the company stock.

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Source: The Spokesman-Review

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