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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended: June 30, 2003

Commission File Number: 1-16609

ALLIANCE IMAGING, INC.
(Exact name of registrant as specified in its charter)

1900 South State College Boulevard
Suite 600
Anaheim, California 92806
(Address of principal executive office)

(714) 688-7100
Registrant's telephone number, including area code

        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. Yes ý    No o

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ý    No o

        Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of July 31, 2003:

Common Stock, $.01 par value, 47,958,987 shares

ALLIANCE IMAGING, INC.
FORM 10-Q
June 30, 2003
Index

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PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ALLIANCE IMAGING, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)

See accompanying notes.

2

ALLIANCE IMAGING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(in thousands, except per share amounts)

See accompanying notes.

3

ALLIANCE IMAGING, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

See accompanying notes.

4

ALLIANCE IMAGING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2003

(Unaudited)

(dollars in thousands, except per share amounts)

1. Basis of Presentation, Principles of Consolidation, and Use of Estimates

        Basis of Presentation—The accompanying unaudited condensed consolidated financial statements have been prepared by Alliance Imaging, Inc. (the "Company") in accordance with accounting principles generally accepted in the United States of America and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-month period ended June 30, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to the consolidated financial statements for the year ended December 31, 2002.

        Principles of Consolidation—The accompanying unaudited condensed consolidated financial statements of the Company include the assets, liabilities, revenues and expenses of all majority owned subsidiaries over which the Company exercises control, and for which control is other than temporary. Intercompany transactions have been eliminated. Investments in non-consolidated affiliates are accounted for under the equity method.

        Use of Estimates—The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

2. Recent Accounting Pronouncements

        Accounting for Costs Associated with Exit or Disposal Activities—In July 2002, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS 146"), which addresses financial accounting and reporting for costs associated with exit or disposal activities and supersedes Emerging Issues Task Force Issue 94-3 ("EITF 94-3"), "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." SFAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. Under EITF 94-3, a liability for an exit cost was recognized at the date of an entity's commitment to an exit plan. SFAS 146 also establishes that the liability should initially be measured and recorded at fair value. The Company adopted the provisions of SFAS 146 for exit or disposal activities initiated after December 31, 2002 which did not have a material effect on the Company's consolidated financial position or results of operations.

        Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others—In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN 45"). FIN 45 elaborates on required disclosures by a guarantor in its financial statements about obligations under certain guarantees that it has issued and clarifies the need for a guarantor to recognize, at the inception of certain guarantees, a liability for the

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fair value of the obligation undertaken in issuing the guarantee. The initial recognition and measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002 while the provisions of the disclosure requirements are effective for financial statements of interim or annual reports ending after December 15, 2002. The Company adopted the disclosure provisions of FIN 45 during the fourth quarter of fiscal 2002 and the recognition provisions on January 1, 2003. The adoption of FIN 45 did not have a material effect on the Company's consolidated financial position or results of operations.

        Accounting for Stock-Based Compensation—Transition and Disclosure—an amendment of SFAS No. 123—In December 2002, the FASB Issued SFAS No. 148, "Accounting for Stock-Based Compensation—Transition and Disclosure—an amendment of SFAS No. 123." This statement amends SFAS No. 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The disclosure provisions of SFAS No. 148 were adopted on December 31, 2002.

        The Company accounts for stock based compensation awards using the intrinsic value method prescribed under APB Opinion No. 25, "Accounting for Stock Issued to Employees," and its related interpretations. Other than the awards discussed in Note 7, all other employee stock-based awards were granted with an exercise price equal to the market value of the underlying common stock on the date of grant and no compensation cost is reflected in net income from operations for those awards.

        SFAS 123 requires presentation of pro forma information regarding net income and earnings per share determined as if the Company had accounted for its employee stock options granted subsequent to December 31, 1994 under the fair value method of that statement. The fair value for these options was estimated as of the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions for the second quarter of 2002 and second quarter of 2003, respectively: risk-free interest rates of 5.11% and 2.99%; no dividend yield; volatility factors of the expected market price of the Company's common stock of 71.9% and 90.5%; and a weighted average expected life of the options of 6.50 years in each year. The Company used the following weighted average assumptions for the first six months of 2002 and 2003, respectively: risk-free interest rates of 4.44% and 3.24%; no dividend yield; volatility factors of the expected market price of the Company's common stock of 71.9% and 77.6%; and a weighted average expected life of the options of 6.50 years in each year. The weighted average fair value of options granted during the second quarter of 2002 and 2003 is $8.51 and $2.95, respectively, and $7.35 and $3.35 in the first six months of 2002 and 2003, respectively.

        The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially

6

affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.

        For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' expected vesting period. Had compensation cost for the Company's stock option plan been determined based on the estimated fair value at the grant dates for awards under the plan consistent with the fair value method of SFAS No. 123 utilizing the Black-Scholes option-pricing model, the Company's net income and basic and diluted earnings per share for the quarters and six months ended June 30, would have approximated the pro forma amounts indicated below:

        Consolidation of Variable Interest Entities—In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"), which addresses consolidation by a business of variable interest entities in which it is the primary beneficiary. FIN 46 is effective immediately for certain disclosure requirements and variable interest entities created after January 31, 2003, and in fiscal 2004 for all other variable interest entities. The Company expects that the provisions of FIN 46 will not have a material effect on its consolidated financial position or results of operations upon adoption since the Company currently has no variable interest entities.

        Amendment of Statement 133 on Derivative Instruments and Hedging Activities—In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities," which amends and clarifies existing accounting pronouncements and addresses financial accounting and reporting for derivative or other hybrid instruments. This statement requires that contracts with comparable characteristics be accounted for similarly. This statement is effective for contracts entered into or modified after June 30, 2003. The Company believes the adoption of SFAS No. 149 will not have a material effect on the Company's consolidated financial position or results of operations since the Company currently has no derivative instruments.

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        Accounting for Certain Instruments with Characteristics of Both Liabilities and Equity—In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Instruments with Characteristics of Both Liabilities and Equity," which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 requires that an issuer classify a financial instrument that is within its scope, which may have previously been reported as equity, as a liability (or an asset in some circumstances). This statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The Company believes the adoption of SFAS No. 150 will not have a material effect on its consolidated financial position or results of operations since the Company currently has no instruments that meet this definition.

3. Goodwill and Intangible Assets

        Changes in the carrying amount of goodwill are as follows:

        Intangible assets consisted of the following:

        Customer contracts have a weighted average useful life of 19 years. Other intangible assets subject to amortization have a weighted average useful life of six years. Amortization expense for intangible assets subject to amortization was $575 and $677 for the quarters ended June 30, 2002 and 2003, respectively, and $1,133 and $1,353 for the six months ended June 30, 2002 and 2003, respectively. The intangible assets not subject to amortization represent certificate of needs and regulatory authority rights which do not have predetermined useful lives.

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        Estimated annual amortization expense for each of the fiscal years ending December 31, is presented below:

4. Other Accrued Liabilities

        Other accrued liabilities consisted of the following:

5. Long-Term Debt

        Long-term debt consisted of the following:

6. Non-Cash Stock-Based Compensation

        In November 2000, the Company granted stock options to certain employees at exercise prices below the fair value of the Company's common stock, of which 105,000 options are outstanding at June 30, 2003. The exercise prices of these options and the fair value of the Company's common stock on the grant date were $5.60 and $9.52 per share, respectively. Compensation expense of $1,190 is being recognized on a straight-line basis over the vesting period of the options. The Company recorded non-cash stock-based compensation of $132 and $18 in the quarters ended June 30, 2002 and 2003,

9

respectively, and $264 and $36 in the first six months of 2002 and 2003, respectively, with an offset to additional paid-in deficit.

        On June 20, 2001, the Company's compensation committee authorized the Company to amend the option agreements under its 1999 Equity Plan to reduce the performance targets for the performance options. One-half of the options granted under the 1999 Equity Plan are "performance options." These options vest on the eighth anniversary of the grant date if the option holder is still an employee, but the vesting accelerates if the Company meets the operating performance targets specified in the option agreements. As a result of the amendment, if the Company achieves the reduced performance targets but does not achieve the original performance targets, and an option holder terminates employment prior to the eighth anniversary of the option grant date, the Company would be required to record a non-cash stock-based compensation charge equal to the amount by which the actual value of the shares subject to the performance option on the date of the amendment exceeded the option's exercise price. Management estimates that the Company could incur an additional $2,000 to $3,000 in the aggregate of these non-cash stock-based compensation charges over the next 2¹/2 years. These charges, however, may not be evenly distributed over each of those 2¹/2 years or over the four quarters in any one year, depending upon the timing of employee turnover and the number of shares subject to the options held by departing employees. For each of the quarters and six months ended June 30, 2002 and 2003, the Company recorded $400 and $800, respectively, in non-cash stock-based compensation as a result of the amendment.

7. Earnings Per Common Share

        The following table sets forth the computation of basic and diluted earnings per share (amounts in thousands, except per share amounts):

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8. Commitments and Contingencies

        The Company from time to time is involved in routine litigation and regulatory matters incidental to the conduct of its business. The Company believes that resolution of such matters will not have a material adverse effect on its consolidated results of operations or financial position.

        The Company has applied the disclosure provisions of FASB Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others," to its agreements that contain guarantee or indemnification clauses. These disclosure provisions expand those required by FASB Statement No. 5, "Accounting for Contingencies," by requiring a guarantor to disclose certain type of guarantees, even if the likelihood of requiring the guarantor's performance is remote. The following is a description of an arrangement in which the Company is the guarantor.

        The Company guarantees a portion of a loan on behalf of an unconsolidated investee. The maximum potential future payment under this financial guarantee is $0.5 million at June 30, 2003. The Company has not recorded an obligation for this guarantee.

9. Related-Party Transactions

        On May 12, 2003, the Company issued 12,677 shares of common stock to an officer in exchange for $67 in cash. The shares were sold to the officer at fair market value.

        The Company paid to Kohlberg Kravis Roberts & Co. ("KKR") management fees of $163 and $325 for each of the quarters and six months ended June 30, 2002 and 2003, respectively, and will continue to receive financial advisory services from KKR on an ongoing basis.

        On June 2, 2003, the Company paid $1,536 to Richard N. Zehner in exchange for the cancellation of his rights to purchase common stock of the Company. In addition, the Company and Mr. Zehner agreed to amend the terms and conditions of his employment. Complete details of this transaction are contained in the Amendment to Employment Agreement, Non-qualified Stock Option Agreement and Non-Compete Agreement between the Company and Mr. Zehner included as an exhibit with this report.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

        We are a leading national provider of diagnostic imaging services, with 85% of our revenues for the first six months of 2003 derived from magnetic resonance imaging, or MRI. We provide imaging services primarily to hospitals and other healthcare providers on a shared and full-time service basis, in addition to operating a growing number of free-standing imaging centers. Our services normally include the use of our imaging systems, technologists to operate the systems, equipment maintenance and upgrades and management of day-to-day operations. We had 461 diagnostic imaging systems, including 362 MRI systems, and 1,331 clients in 43 states at June 30, 2003.

        Approximately 89% of our revenues for the first six months of 2003 were generated by providing services to hospitals and other healthcare providers, which we refer to as wholesale revenues. Our wholesale revenues are typically generated from contracts that require our clients to pay us based on the number of scans we perform, although some pay us a flat fee for a period of time regardless of the number of scans we perform. These payments are due to us independent of our clients' receipt of reimbursement from third-party payors. We typically deliver our services for a set number of days per week through exclusive, long-term contracts with hospitals and other healthcare providers. These contracts, which are usually three to five years in length, are typically non-cancelable by our clients and often contain automatic renewal provisions. We price our contracts based on the type of system used, the scan volume, and the number of ancillary services provided. Our pricing is also influenced by competitive market pressures.

        Approximately 11% of our revenues for the six months ended June 30, 2003 were generated by providing services directly to patients from our sites located at or near hospital or other healthcare provider facilities, which we refer to as retail revenues. Our revenues from these sites are generated from direct billings to patients or their third-party payors, which are recorded net of contractual discounts and other arrangements for providing services at discounted prices. We typically charge a higher price per scan under retail billing than we do under wholesale billing.

        The principal components of our operating costs, excluding depreciation, are compensation paid to technologists and drivers, system maintenance costs, medical supplies, transportation and travel costs. Because a majority of these expenses are fixed, increased revenues as a result of higher scan volumes per system significantly improves our margins while lower scan volumes result in lower margins.

        The principal components of our selling, general and administrative expenses are sales force compensation, marketing costs, corporate overhead costs, provision for doubtful accounts, and minority interest expense.

        For the six months ended June 30, 2003, we recorded $0.8 million in non-cash stock-based compensation primarily as a result of amending certain stock option agreements in June 2001 to reduce performance targets and granting options in November 2000 to purchase our common stock at an exercise price below its fair value. One-half of the options granted under our 1999 Equity Plan are "performance options." These options vest on the eighth anniversary of the grant date if the option holder is still our employee, but the vesting accelerates if we meet the operating performance targets specified in the option agreements. On June 20, 2001, our compensation committee authorized us to enter into amended option agreements to reduce the performance targets for the performance options. As a result, if we achieve the reduced performance targets but do not achieve the original performance targets, and an option holder terminates employment prior to the eighth anniversary of the option grant date, we would be required to record a non-cash stock-based compensation charge equal to the amount by which the actual value of the shares subject to the performance option on the date of the amendment exceeded the option's exercise price. We estimate that we will incur an additional

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$2 million to $3 million in the aggregate of non-cash stock-based compensation charges over the next 2¹/2 years as a result of amending option agreements to reduce performance targets. These charges, however, may not be evenly distributed over each of those 2¹/2 years or over the four quarters in any one year, depending upon the timing of employee turnover and the number of shares subject to the options held by departing employees.

Seasonality

        We experience seasonality in the revenues and margins generated for our services. First and fourth quarter revenues are typically lower than those from the second and third quarters. First quarter revenue is affected primarily by fewer calendar days and inclement weather, the results of which are fewer patient scans during the period. Fourth quarter revenue is affected primarily by holiday and client and patient vacation schedules and inclement weather, the results of which are fewer patient scans during the period. The variability in margins is higher than the variability in revenues due to the fixed nature of our costs.

Results of Operations

Quarter Ended June 30, 2003 Compared to Quarter Ended June 30, 2002

        Revenue increased $1.5 million, or 1.5%, to $105.3 million in the second quarter of 2003 compared to $103.8 million in the second quarter of 2002 primarily due to higher positron emission tomography, or PET, revenue, higher non-scan based revenue and other revenue, offset by lower scan-based MRI revenue. PET revenue in the second quarter of 2003 increased $6.5 million, or 92.5%, compared to the second quarter of 2002 primarily due to an increase in the number of PET systems in service. Non-scan based MRI revenue and other revenue in the second quarter of 2003 increased $0.5 million, or 3.3%, primarily due to higher non-scan based revenue and higher management contract revenue. Scan-based MRI revenue in the second quarter of 2003 decreased $5.5 million, or 6.7%, compared to the second quarter of 2002 primarily as a result of a 6.6% decrease in our MRI scan volume. We attribute this decrease to a decline in average daily scan volume per MRI and a decrease in the MRI price per scan, partially offset by an increase in the average number of additional scan-based systems in operation. The average daily scan volume per MRI system decreased to 9.5 in the second quarter of 2003 from 10.0 in the second quarter of 2002 as a result of some higher volume clients choosing not to renew their contracts and our providing more days of service to existing clients than their growth in scan volume. The average price per MRI scan decreased 0.1% to $363.7 per scan in the second quarter of 2003 compared to $364.2 per scan in the second quarter of 2002.

        We had 362 MRI systems at June 30, 2003 compared to 351 MRI systems at June 30, 2002. We had 35 PET systems at June 30, 2003 compared to 19 PET systems at June 30, 2002. These increases were primarily a result of planned system additions to satisfy client demand.

        Operating expenses, excluding depreciation, increased $4.1 million, or 9.2%, to $48.9 million in the second quarter of 2003 compared to $44.8 million in the second quarter of 2002. Medical supplies increased $1.2 million, or 46.8%, primarily as a result of an increase in the number of PET systems in operation, which use a radiopharmaceutical as a component of the scan. Compensation and related employee expenses increased $1.0 million, or 4.7%, primarily as a result of an increase in technologists' wage rates and the number of employees necessary to support new systems in operation. Maintenance related costs increased $1.0 million, or 10.8%, primarily due to an increase in the average repair cost per system and an increase in the number of systems in service. Insurance expense increased $0.4 million, or 66.3%, primarily due to an increase in insurance premiums. Outside medical services increased $0.3 million, or 23.4%, primarily as a result of an increase in outside radiologists services associated with PET. Equipment rental expense decreased $0.5 million, or 35.6%, resulting from a lower number of leased MRI systems and transportation units in operation. All other operating

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expenses, excluding depreciation, increased $0.7 million, or 7.8%, primarily due to the increase in the number of systems in service. Operating expenses, excluding depreciation, as a percentage of revenue, increased to 46.4% in the second quarter of 2003 from 43.1% in the second quarter of 2002 as a result of the factors described above.

        Selling, general and administrative expenses increased $0.8 million, or 6.4%, to $12.8 million in the second quarter of 2003 compared to $12.0 million in the second quarter of 2002. Compensation and related employee expenses increased $0.7 million, or 11.0%, primarily due to increases in the executive management and retail scheduling and billing areas. Professional services expenses increased $0.6 million, or 98.9%, in the second quarter of 2003 compared to the second quarter of 2002 primarily due to legal and consulting costs associated with the negotiation with collective bargaining representatives over the terms and conditions of employment of drivers in our Mid-Atlantic and New England Regions. These increases were offset by a decrease in the provision for doubtful accounts of $0.5 million, or 38.6%, primarily as a result of an improvement in collections of older accounts receivable. The provision for doubtful accounts decreased as a percentage of revenue to 0.8% in the second quarter of 2003 compared to 1.4% in the second quarter of 2002. Selling, general and administrative expenses as a percentage of revenue were 12.2% and 11.6% in the second quarter of 2003 and 2002, respectively.

        We recorded an employment agreement expense of $1.7 million in the second quarter of 2003 related to payments under an amendment to an employment agreement with our chairman of the board. We expect to incur approximately $2.1 million of costs over the remaining two year term of the amended employment agreement.

        We recorded severance and related costs of $1.5 million in the second quarter of 2003 primarily related to severance and settlement payments made as a result of a reductions-in-force. We expect to incur severance and related costs in future quarters as we continue to review and adjust our resource needs.

        We recorded non-cash stock based compensation of $0.4 and $0.5 million in the second quarter of 2003 and 2002, respectively, as a result of amending certain stock option agreements in June 2001 to reduce performance targets and granting options in November 2000 to purchase our common stock at an exercise price below its fair value.

        Depreciation expense increased $1.4 million, or 8.2%, to $18.7 million in the second quarter of 2003 compared to $17.3 million in the second quarter of 2002, principally due to a higher amount of depreciable assets associated with MRI system additions and upgrades, as well as an increase in the number of PET systems, which have a shorter depreciable life than MRIs.

        Amortization expense increased $0.1 million, or 17.7%, to $0.7 million in the second quarter of 2003 compared to $0.6 million in the second quarter of 2002.

        Interest expense, net, decreased $1.0 million, or 8.1%, to $11.1 million in the second quarter of 2003 compared to $12.1 million in the second quarter of 2002, primarily due to lower average debt balances and lower average interest rates.

        Provision for income taxes was $4.0 million and $6.8 million in the second quarter of 2003 and 2002, respectively, resulting in an effective tax rate of 41.5% in both years. Our effective tax rates were higher than statutory rates primarily as a result of state income taxes.

        Our net income was $5.7 million, or $0.12 per share on a diluted basis, in the second quarter of 2003 compared to $9.6 million, or $0.19 per share on a diluted basis, in the second quarter of 2002.

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Six Months Ended June 30, 2003 Compared to June 30, 2002

        Revenue increased $5.5 million, or 2.7%, to $208.1 million in the first six months of 2003 compared to $202.6 million in the first six months of 2002 primarily due to higher PET revenue, higher non-scan based MRI revenue and other revenue, offset by lower scan-based MRI revenue. PET revenue in the first six months of 2003 increased $13.2 million, or 109%, compared to the first six months of 2002 primarily as a result an increase in the number of PET systems in service. Non-scan based MRI revenue and other revenue in the first six months of 2003 increased $1.3 million, or 4.6%, primarily due to higher non-scan based revenue and higher management contract revenue. Scan-based MRI revenue in the first six months of 2003 decreased $9.0 million, or 5.6%, primarily as a result of a 5.1% decrease in our MRI scan volume. We attribute this decrease to a decline in average daily scan volume per MRI and a decrease in the MRI price per scan, partially offset by an increase in the average number of additional scan-based systems in operation. The average daily scan volume per MRI system decreased to 9.5 in the first six months of 2003 from 9.8 in the first quarter of 2002 as a result of some higher volume clients choosing not to renew their contracts and our providing more days of service to existing clients than their growth in scan volume. The average price per MRI scan decreased 0.5% to $364.7 per scan in the first six months of 2003 compared to $366.6 per scan in the corresponding period of 2002 primarily as a result of price reductions granted to certain clients upon renewal of their contracts and competitive pricing pressures.

        We had 362 MRI systems at June 30, 2003 compared to 351 MRI systems at June 30, 2002. We had 35 PET systems at June 30, 2003 compared to 19 PET systems at June 30, 2002. The increase was primarily a result of planned system additions to satisfy client demand.

        Operating expenses, excluding depreciation, increased $9.3 million, or 10.5%, to $98.2 million in the first six months of 2003 compared to $88.9 million in the first six months of 2002. Compensation and related employee expenses increased $2.8 million, or 6.6%, primarily as a result of an increase in technologists' wage rates and the number of employees necessary to support new systems in operation. Medical supplies increased $2.2 million, or 43.9%, primarily as a result of an increase in the number of PET systems in operation, which use a radiopharmaceutical as a component of the scan. Maintenance related costs increased $1.3 million, or 7.3%, primarily due to an increase in the average repair cost per system and an increase in the number of systems in service. Outside medical services increased $1.0 million, or 38.8%, primarily as a result of an increase in outside radiologists services associated with PET. Insurance expense increased $0.8 million, or 71.7%, primarily due to an increase in insurance premiums. Equipment rental expense decreased $0.6 million, or 19.5%, resulting from a lower number of leased MRI systems and transportation units in operation. Fuel expenses increased $0.5 million, or 27.2%, primarily due to higher diesel fuel prices in the first six months of 2003. All other operating expenses, excluding depreciation, increased $1.3 million, or 7.9%, primarily due to the increase in the number of systems in service. Operating expenses, excluding depreciation, as a percentage of revenue, increased to 47.2% in the first six months of 2003 from 43.9% in the first six months of 2002 as a result of the factors described above.

        Selling, general and administrative expenses increased $1.2 million, or 5.3%, to $24.3 million in the first six months of 2003 compared to $23.1 million in the first six months of 2002. Compensation and related employee expenses increased $1.7 million, or 12.8%, primarily due to increases in executive management, retail scheduling and billing, and sales and marketing areas. Professional services expenses increased $1.0 million, or 89.5%, in the first six months of 2003 compared to the first six months of 2002 primarily due to legal and consulting costs associated with the negotiation with collective bargaining representatives over the terms and conditions of employment of drivers in our Mid-Atlantic and New England Regions. These increases were offset by a decrease in the provision for doubtful accounts of $1.8 million, or 61.0%, primarily as a result of an improvement in collections of older accounts receivable. The provision for doubtful accounts decreased as a percentage of revenue to 0.6% in the first six months of 2003 compared to 1.4% in the corresponding period of 2002. All other

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selling, general and administrative expenses increased $0.3 million, or 4.7%. Selling, general and administrative expenses as a percentage of revenue were 11.7% and 11.4% in the first six months of 2003 and 2002, respectively.

        We recorded an employment agreement expense of $1.7 million in the first six months of 2003 related to payments under an amendment to an employment agreement with our chairman of the board. We expect to incur approximately $2.1 million of costs over the remaining two year term of the amended employment agreement.

        We recorded severance and related costs of $1.7 million in the first six months of 2003 primarily related to severance and settlement payments made as a result of a reductions-in-force. We expect to incur severance and related costs in future quarters as we continue to review and adjust our resource needs.

        We recorded non-cash stock based compensation of $0.8 and $1.1 million in the first six months of 2003 and 2002, respectively, as a result of amending certain stock option agreements in June 2001 to reduce performance targets and granting options in November 2000 to purchase our common stock at an exercise price below its fair value.

        Depreciation expense increased $2.5 million, or 7.4%, to $36.6 million in the first six months of 2003 compared to $34.1 million in the first six months of 2002, principally due to a higher amount of depreciable assets associated with MRI system additions and upgrades, as well as an increase in the number of PET systems which have a shorter depreciable life than MRIs.

        Amortization expense increased $0.2 million, or 19.4%, to $1.4 million in the second quarter of 2003 compared to $1.2 million in the first six months of 2002.

        Interest expense, net, decreased $2.1 million, or 8.8%, to $22.2 million in the first six months of 2003 compared to $24.3 million in the first six months of 2002, primarily due to lower average debt balances and lower average interest rates.

        Provision for income taxes was $8.9 million and $12.4 million in the first six months of 2003 and 2002, respectively, resulting in an effective tax rate of 41.5% in both years. Our effective tax rates were higher than statutory rates primarily as a result of state income taxes.

        Our net income was $12.5 million, or $0.26 per share on a diluted basis, in the first six months of 2003 compared to $17.5 million, or $0.35 per share on a diluted basis, in the first six months of 2002.

Liquidity and Capital Resources

        Our primary source of liquidity is cash provided by operating activities. Cash provided from operating activities totaled $59.6 million and $61.0 million in the first six months of 2003 and 2002, respectively. Our ability to generate cash flow is affected by numerous factors, including demand for our diagnostic imaging services, the price we can charge our clients for providing diagnostic imaging services, and the costs to us of providing these services. In addition, as of June 30, 2003, we had $136.5 million of available borrowings under our revolving line of credit.

        Our primary use of capital resources is to fund capital expenditures. We incur capital expenditures for the purposes of:

•

purchasing new systems;



•

replacing less advanced systems with new systems;



•

providing upgrades of our MRI systems and upgrading our corporate infrastructure for future growth; and



•

purchasing systems upon termination of operating leases.

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        Capital expenditures totaled $50.5 million and $37.3 million in the first six months of 2003 and 2002, respectively. During the first six months of 2003, we purchased 20 MRI systems, six PET systems and three CT systems, including replacement systems. Our decision to purchase a new system is typically predicated on obtaining new or extending existing client contracts, which serve as the basis of demand for the new system. We expect to purchase additional systems in 2003 and to finance substantially all of these purchases with our available cash, cash provided by operating activities and our revolving line of credit. We expect capital expenditures to total approximately $85 million to $90 million in 2003.

        On March 30, 2003, we entered into a joint venture agreement with GE Capital Corporation to form Affordable Imaging Rentals, LLC (the entity has subsequently had a legal name change to Mobile Interim Solutions, LLC.) We each invested $8.7 million in cash for our respective 50% equity interests.

        We believe that, based on current levels of operations and anticipated growth, our cash provided by operating activities, together with other available sources of liquidity, including amounts available under our revolving loan facility, will be sufficient over the next year to fund anticipated capital expenditures and make required payments of principal and interest on our debt, including payments due under our credit agreement.

Recent Accounting Pronouncements

        In July 2002, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS 146"), which addresses financial accounting and reporting for costs associated with exit or disposal activities and supersedes Emerging Issues Task Force Issue 94-3 ("EITF 94-3"), "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." SFAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. Under EITF 94-3, a liability for an exit cost was recognized at the date of an entity's commitment to an exit plan. SFAS 146 also establishes that the liability should initially be measured and recorded at fair value. We adopted the provisions of SFAS 146 for exit or disposal activities initiated after December 31, 2002 which did not have a material effect on our consolidated financial position or results of operations.

        In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN 45"). FIN 45 elaborates on required disclosures by a guarantor in its financial statements about obligations under certain guarantees that it has issued and clarifies the need for a guarantor to recognize, at the inception of certain guarantees, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002 while the provisions of the disclosure requirements are effective for financial statements of interim or annual reports ending after December 15, 2002. We adopted the disclosure provisions of FIN 45 during the fourth quarter of fiscal 2002 and the recognition provisions on January 1, 2003. The adoption of FIN 45 did not have a material effect on our consolidated financial position or results of operations.

        In December 2002, the FASB Issued SFAS No. 148, "Accounting for Stock-Based Compensation—Transition and Disclosure—an amendment of SFAS No. 123." This statement amends SFAS No. 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for

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stock-based employee compensation and the effect of the method used on reported results. The disclosure provisions of SFAS No. 148 were adopted on December 31, 2002.

        In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46"), which addresses consolidation by a business of variable interest entities in which it is the primary beneficiary. FIN 46 is effective immediately for certain disclosure requirements and variable interest entities created after January 31, 2003, and in fiscal 2004 for all other variable interest entities. We expect that the provisions of FIN 46 will not have a material effect on its consolidated financial position or results of operations upon adoption since we currently have no variable interest entities.

        In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities," which amends and clarifies existing accounting pronouncements and addresses financial accounting and reporting for derivative or other hybrid instruments. This statement requires that contracts with comparable characteristics be accounted for similarly. This statement is effective for contracts entered into or modified after June 30, 2003. We believe the adoption of SFAS No. 149 will not have a material effect on our consolidated financial position or results of operations since we currently have no derivative instruments.

        In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Instruments with Characteristics of Both Liabilities and Equity," which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 requires that an issuer classify a financial instrument that is within its scope, which may have previously been reported as equity, as a liability (or an asset in some circumstances). This statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. We believe the adoption of SFAS No. 150 will not have a material effect on our consolidated financial position or results of operations since we currently have no instruments that meet this definition.

Cautionary Statement Pursuant to the Private Securities Litigation Reform Act of 1995

        Certain statements contained in Management's Discussion and Analysis of Financial Condition and Results of Operations, particularly in the section entitled "Liquidity and Capital Resources," and elsewhere in this quarterly report on Form 10-Q, are "forward-looking statements," within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements which address activities, events or developments that we expect or anticipate will or may occur in the future, including such things as results of operations and financial condition, capital expenditures, the consummation of acquisitions and financing transactions and the effect of such transactions on our business and our plans and objectives for future operations and expansion are examples of forward-looking statements. In some cases you can identify these statements by forward-looking words like "may," "will," "should," "expect," "anticipate," "believe," "estimate," "predict," "continue" or similar words. These forward-looking statements are subject to risks and uncertainties which could cause actual outcomes and results to differ materially from our expectations, forecasts and assumptions. These risks and uncertainties include factors affecting our leverage, including fluctuations in interest rates, our ability to incur financing, the effect of operating and financial restrictions in our debt instruments, the accuracy of our estimates regarding our capital requirements, the effect of intense levels of competition in our industry, changes in the healthcare regulatory environment, our ability to keep pace with technological developments within our industry, and other risks and uncertainties, including those enumerated and described under "Risk Factors" in our Form 10-K, as filed with the Securities and Exchange Commission, for the fiscal year ended December 31, 2002. The foregoing should not be construed as an exhaustive list of all factors which could cause actual results to differ materially from those expressed in forward-looking statements made by us.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        We sell our services exclusively in the United States and receive payment for our services exclusively in United States dollars. As a result, our financial results are unlikely to be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets.

        Our interest expense is sensitive to changes in the general level of interest rates in the United States, particularly because the majority of our indebtedness has interest rates which are variable. The recorded carrying amount of our long-term debt under our credit agreement approximates fair value as these borrowings have variable rates that reflect currently available terms and conditions for similar debt.

        Our interest income is sensitive to changes in the general level of interest rates in the United States, particularly because the majority of our investments are in cash equivalents. The recorded carrying amounts of cash and cash equivalents approximate fair value due to their short-term maturities.

ITEM 4. CONTROLS AND PROCEDURES

        We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Also, we have investments in certain unconsolidated entities. As we do not control or manage these entities, our disclosure controls and procedures with respect to such entities are necessarily substantially more limited than those we maintain with respect to our consolidated subsidiaries. These unconsolidated entities are not considered material to our consolidated financial position or results of operations.

        As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the quarter covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

        There has been no change in our internal controls over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        From time to time, we are involved in routine litigation incidental to the conduct of our business. We believe that none of this litigation pending against us will have a material adverse effect on our business.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

        On May 12, 2003, we sold and issued to Paul S. Viviano 12,677 shares of our common stock for a purchase price of $5.28 per share in a private placement. Mr. Viviano paid cash in full for these shares at the fair market value of the shares. The proceeds from this transaction was $66,935. No underwriter or placement agent was involved in the transaction. The sale of shares was made pursuant to Section 4(2) of the Securities Act of 1933, as amended, in reliance on, among other facts, Mr. Viviano's financial sophistication and access to information and the absence of general solicitation or advertising.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(a)

The 2003 Annual Meeting of Stockholders of Alliance Imaging, Inc. was held on May 14, 2003.



(b)

The following nominees were elected as Class II Directors for a three-year term expiring at the 2006 Annual Meeting: James H. Greene, Jr., Anthony B. Helfet and Richard N. Zehner. The Class III Directors, James C. Momtazee, Michael W. Michelson, and Edward L. Samek, whose terms expire at the 2004 Annual Meeting, and the Class I Directors, Henry R. Kravis, Paul S. Viviano and Neil F. Dimick, whose terms expire at the 2005 Annual Meeting, continue to serve on our Board of Directors.



(c)

Certain matters voted upon at the meeting and the votes cast with respect to such matters are as follows:

Proposal and Vote Tabulation

Election of Directors

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ITEM 5. OTHER INFORMATION

        On April 7, 2003, our Board of Directors announced that Richard N. Zehner, our Chairman, Chief Executive Officer and founder, assumed the sole role of Chairman of the Board. The Board of Directors appointed Paul S. Viviano as Chief Executive Officer in addition to his duties as President and Board member. Mr. Viviano joined us in January 2003 as our President and Chief Operating Officer. Also on April 7, 2003, Andrew P. Hayek joined us as Executive Vice President and Chief Operating Officer.

        On May 5, 2003, Terry A. Andrues, formerly one of our Executive Vice Presidents, became President of Affordable Imaging Rentals, LLC, a joint venture between the Company and GE Capital Corporation. We and GE Capital Corporation each invested $8.7 million in cash for each of our respective 50% equity interests.

        On May 5, 2003, our Board of Directors authorized the Executive Committee of the Board of Directors, as market and business conditions warrant, to repurchase up to 1,000,000 shares of the Company's common stock for cash. Purchases may be made in the open market or in privately negotiated transactions from time to time at the Executive Committee's discretion for a one-year period.

        On May 9, 2003, Cheryl A. Ford announced her departure as an Executive Vice President, effective May 17, 2003.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)

Exhibits

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22

(1)

Incorporated by reference to exhibits filed with the Company's Registration Statement on Form S-2, No. 333-33817.



(2)

Incorporated by reference herein to the indicated Exhibit in response to Item 14(a)(3), "Exhibits" of the Company's Annual Report on Form 10-K for the year ended December 31, 1997.



(3)

Incorporated by reference herein to the indicated Exhibit in response to Item 14(a)(3), "Exhibits" of the Company's Annual Report on Form 10-K for the year ended December 31, 1998.



(4)

Incorporated by reference to exhibits filed in response to Item 6, "Exhibits" of the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998.



(5)

Incorporated by reference to exhibits filed with the Company's Registration Statement on Form S-4, No. 333-60682, as amended.



(6)

Incorporated by reference to exhibits filed with the Company's Registration Statement on Form S-1, No. 333-64322, as amended.



(7)

Incorporated by reference to exhibits filed in response to Item 6, "Exhibits" of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001.



(8)

Incorporated by reference to exhibits filed in response to Item 6, "Exhibits" of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.



(9)

Incorporated by reference herein to the indicated Exhibit response in Item 15(a)(3), "Exhibits" of the Company's Annual Report on Form 10-K for the year ended December 31, 2002.



(10)

Filed herewith.

(b)

Reports on Form 8-K in the second quarter of 2003:

On May 6, 2003, pursuant to Securities and Exchange Commission Release No. 33-8216, we filed a Form 8-K containing a press release issued on May 5, 2003, which sets forth our results of operations for the quarter ended March 31, 2003.

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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.

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QuickLinks

PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 4. CONTROLS AND PROCEDURES
PART II—OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K