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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: March 31, 2004

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 April 30, 2004:

Common Stock, $.01 par value, 47,978,987 shares

ALLIANCE IMAGING, INC.
FORM 10-Q
March 31, 2004

Index

1

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

March 31, 2004

(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 quarter ended March 31, 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. 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, 2003.

        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 condensed 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 condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

2.     Stock-Based Compensation

        The Company accounts for stock-based compensation awards using the intrinsic value method prescribed under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), 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, as amended by SFAS 148, 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 first quarter of 2003 and first quarter of 2004, respectively: risk-free interest rates of 3.36% and 3.02%; no dividend yield; volatility factors of the expected market price of the Company's common stock of 72.1% and 60.7%; and a weighted-average expected life of the options of 6.50 years and 5.19 years. The weighted-average fair value of options granted during the first quarter of 2003 and 2004 is $3.52 and $2.01, 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

5

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 123 utilizing the Black-Scholes option-pricing model, the Company's net income and basic and diluted earnings per share for the quarters ended March 31, would have approximated the pro forma amounts indicated below:

3.     Recent Accounting Pronouncements

        Accounting for Certain Instruments with Characteristics of Both Liabilities and Equity —In May 2003, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 150, "Accounting for Certain Instruments with Characteristics of Both Liabilities and Equity" ("SFAS 150"), which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS 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. In October 2003, the FASB deferred implementation of paragraphs 9 and 10 of SFAS 150 regarding parent company treatment of minority interest for certain limited life entities and certain other mandatorily redeemable financial instruments. This deferral is for an indefinite period. The adoption of SFAS 150 did not have a material impact on the Company's financial position or results of operations.

        Revenue Recognition—In December 2003, the Securities and Exchange Commission released Staff Accounting Bulletin ("SAB") No. 104, "Revenue Recognition", which supersedes SAB 101, "Revenue Recognition in Financial Statements." SAB 104 clarifies existing guidance regarding revenues for contracts which contain multiple deliverables to make it consistent with Emerging Issues Task Force ("EITF") No. 00-21, "Accounting for Revenue Arrangements with Multiple Deliverables." The adoption of SAB 104 did not have a material impact on the Company's revenue recognition policies, nor its financial position or results of operations.

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4.     Goodwill and Other Intangible Assets

        Changes in the carrying amount of goodwill are as follows:

        Intangible assets consisted of the following:

        The Company reviews the recoverability of the carrying value of goodwill on an annual basis or more frequently when an event occurs or circumstances change to indicate an impairment of these assets has possibly occurred. Goodwill is allocated to the Company's various reporting units which represent the Company's ten geographical regions. The Company compares the fair value of the reporting unit to its carrying amount to determine if there is potential impairment. The implied fair value for goodwill is determined based on the fair value of assets and liabilities of the respective reporting units based on discounted cash flows, market multiples, or appraised values as appropriate.

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

5.     Other Accrued Liabilities

        Other accrued liabilities consisted of the following:

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6.     Long-Term Debt

        Long-term debt consisted of the following:

7.     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 60,000 options are outstanding at March 31, 2004. 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 $1,097 is being recognized on a straight-line basis over the vesting period of the options. The Company recorded non-cash stock-based compensation of $18 in each of the quarters ended March 31, 2003 and 2004, with an offset to paid-in-capital deficit.

        On June 20, 2001, the Company's compensation committee authorized the Company to amend the option agreements granted under its 1999 Equity Plan on November 2, 1999 to reduce the performance targets for the performance options. One-half of these 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 $200 to $600 in the aggregate of these non-cash stock-based compensation charges over the next 1³/4 years. These charges, however, may not be evenly distributed over each of those 1³/4 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 the quarters ended March 31, 2003 and 2004, the Company recorded $400 and $80, respectively, in non-cash stock-based compensation as a result of the amendment.

8.     Income Taxes

        For the quarter ended March 31, 2003 and 2004, the Company recorded a provision for income taxes of $4,881 and $3,106, or 41.5% and 40.6% of the Company's pretax income, respectively. The Company's effective tax rate was higher than statutory rates primarily as a result of state income taxes.

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9.     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):

10.   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 types 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 under an agreement executed prior to 2002. The maximum potential future payment under this financial guarantee is $381 at March 31, 2004. The Company has not recorded an obligation for this guarantee.

11.   Related-Party Transactions

        The Company paid to Kohlberg Kravis Roberts & Co. ("KKR") management fees of $163 for each of the quarters ended March 31, 2003 and 2004, respectively, and will continue to receive financial advisory services from KKR on an ongoing basis.

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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. 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 principal sources of revenue are derived from magnetic resonance imaging (MRI) and positron emission tomography (PET) services. In the first quarter of 2004, MRI services and PET services generated 74% and 17% of our revenues, respectively. 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 477 diagnostic imaging systems, including 363 MRI systems, and 1,348 clients in 44 states at March 31, 2004.

        Approximately 88% of our revenues for the quarter ended March 31, 2004 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 average approximately three years in length 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 12% of our revenues for the quarter ended March 31, 2004 were generated by providing services directly to patients from our sites located at or near hospitals 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.

        We have recently seen an increase in the competitive climate in the MRI industry, resulting in an increase in activity by original equipment manufacturers, or OEM's, selling systems directly to certain of our clients. Typically, OEM's target our higher scan volume clients. This has caused an increase in the number of our higher scan volume clients deciding not to renew their contracts. We replace these higher volume scan clients typically with lower volume clients. As a result, we expect our 2004 MRI revenues to decline compared to 2003 levels and we believe that MRI revenues from our shared service operations will continue to decline in future years.

        The principal components of our operating costs, excluding depreciation, are compensation paid to technologists and drivers, system maintenance costs, medical supplies, system transportation and technologists' 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 equity interest earnings in unconsolidated partnerships.

        For the quarter ended March 31, 2004, we recorded $0.1 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

10

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 $0.2 million to $0.6 million in the aggregate of non-cash stock-based compensation charges over the next 1³/4 years as a result of amending option agreements to reduce performance targets. These charges, however, may not be evenly distributed over each of those 1³/4 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. The first quarter of 2004 benefited from one extra calendar day due to the leap year. This had the effect of increasing revenue and income in the first quarter of 2004. 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

        The following table shows our condensed consolidated statements of income as a percentage of revenues for each of the quarters ended March 31:

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        The table below provides scan-based MRI statistical information for each of the quarters ended March 31:

        Following are the components of revenue for each of the quarters ended March 31 (in millions):

Quarter Ended March 31, 2004 Compared to Quarter Ended March 31, 2003

        Revenue increased $2.9 million, or 2.8%, to $105.6 million in the first quarter of 2004 compared to $102.7 million in the first quarter of 2003 primarily due to higher PET revenue and higher non scan-based MRI revenue and other revenue, offset by lower scan-based MRI revenue. PET revenue in the first quarter of 2004 increased $5.8 million, or 48.5%, compared to the first quarter of 2003 primarily due to an increase in the number of PET systems in service. Non scan-based MRI revenue and other revenue in the first quarter of 2004 increased $1.4 million, or 9.7%, primarily due to higher short-term MRI rental revenue and higher management contract revenue due to growth in unconsolidated joint ventures. Scan-based MRI revenue in the first quarter of 2004 decreased $4.3 million, or 5.7%, compared to the first quarter of 2003 primarily as a result of a 2.7% decrease in our MRI scan volume. We attribute this decrease to a decrease in the average price per MRI scan and a decrease in the average number of scan-based systems in operation. The average number of scan-based MRI systems decreased to 296.1 in the first quarter of 2004 from 309.0 in the first quarter of 2003. The average price per MRI scan decreased 3.1% to $354.3 per scan in the first quarter of 2004 compared to $365.7 per scan in the first quarter of 2003.

        We had 363 MRI systems at March 31, 2004 compared to 358 MRI systems at March 31, 2003. We had 48 PET and PET/CT systems at March 31, 2004 compared to 32 PET systems at March 31, 2003. These increases were primarily a result of planned system additions to satisfy client demand.

        Operating expenses, excluding depreciation, increased $4.0 million, or 8.1%, to $53.3 million in the first quarter of 2004 compared to $49.3 million in the first quarter of 2003. Compensation and related employee expenses increased $1.4 million, or 5.8%, primarily as a result of an increase in technologists' wage rates, the number of employees necessary to support new PET systems in operation, and an increase in workers' compensation expense. Equipment rental expense decreased $1.1 million, or 69.7%, resulting from a lower number of MRI rental systems and power units in operation. Maintenance related costs increased $1.0 million, or 10.4%, primarily due to an increase in the average repair cost per system and an increase in the number of total systems in service. Medical supplies increased $0.9 million, or 25.6%, 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. Management contract expenses increased $0.8 million, or 51.9%, primarily as a result of an increase in expenses related to growth in unconsolidated joint ventures. Outside medical services increased $0.8 million, or 44.2%, primarily as a result of an increase in outside radiologists services associated with PET. All other operating expenses, excluding depreciation, increased $0.2 million, or 3.4%, primarily due to the increase in the number of systems in service. Operating expenses, excluding depreciation, as a

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percentage of revenue, increased to 50.4% in the first quarter of 2004 from 48.0% in the first quarter of 2003 as a result of the factors described above.

        Selling, general and administrative expenses increased $0.2 million, or 1.5%, to $11.2 million in the first quarter of 2004 compared to $11.0 million in the first quarter of 2003. Compensation and related employee costs increased $0.5 million, or 6.4%, primarily due to increases in sales and marketing costs. Professional services expenses increased $0.4 million, or 48.0%, in the first quarter of 2004 compared to the first quarter of 2003 primarily due to management consulting fees and legal costs associated with business development and sales incentive plans and management fees associated with compliance with the Sarbanes-Oxley Act of 2002. All other selling, general and administrative expenses decreased $0.7 million, or 29.5%. The provision for doubtful accounts increased as a percentage of revenue to 0.4% in the first quarter of 2004 compared to 0.2% in the first quarter of 2003. Selling, general and administrative expenses as a percentage of revenue were 10.6% and 10.7% in the first quarter of 2004 and 2003, respectively.

        Minority interest expense increased $0.3 million, or 58.9%, to $0.8 million in the first quarter of 2004 compared to $0.5 million in the first quarter of 2003.

        We recorded employment agreement expenses of $0.3 million in the first quarter of 2004 related to payments under an amendment to an employment agreement with our former chairman of the board. We expect to incur approximately $1.3 million of costs over the remaining 14-month term of the amended employment agreement.

        We recorded severance and related costs of zero and $0.2 million in the first quarter of 2004 and 2003, respectively, primarily related to severance and settlement payments made as a result of a reduction in force.

        We recorded non-cash stock-based compensation of $0.1 million and $0.4 million in the first quarter of 2004 and 2003, respectively, primarily as a result of amending certain stock option agreements in June 2001 to reduce performance targets.

        Depreciation expense increased $3.0 million, or 16.6%, to $20.8 million in the first quarter of 2004 compared to $17.9 million in the first quarter of 2003, principally due to a higher amount of depreciable assets associated with MRI system additions and upgrades, an increase in the number of PET systems, which have a shorter depreciable life than MRIs, and a reduction of estimated useful lives of 1.5 Tesla MRI systems from eight years to seven years and a reduction in residual values on all of our MRI equipment from 20% to 10% during the third quarter of 2003.

        Amortization expense increased $0.2 million, or 29.6%, to $0.9 million in the first quarter of 2004 compared to $0.7 million in the first quarter of 2003.

        Interest expense, net, decreased $0.5 million, or 4.4%, to $10.6 million in the first quarter of 2004 compared to $11.1 million in the first quarter of 2003, primarily due to lower average debt balances and lower average interest rates.

        Provision for income taxes was $3.1 million and $4.9 million in the first quarter of 2004 and 2003, respectively, resulting in effective tax rates of 40.6% and 41.5%. Our effective tax rates were higher than statutory rates primarily as a result of state income taxes.

        Our net income was $4.5 million, or $0.09 per share on a diluted basis, in the first quarter of 2004 compared to $6.9 million, or $0.14 per share on a diluted basis, in the first quarter of 2003.

Liquidity and Capital Resources

        Our primary source of liquidity is cash provided by operating activities. Cash provided from operating activities totaled $35.9 million and $30.7 million in the first quarter of 2004 and 2003, respectively. Our ability to generate cash flow is affected by numerous factors, including demand for MRI and PET scans, the price we can charge our clients for providing our services and the costs to us

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of providing those services. In addition, as of March 31, 2004, we had $147.0 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.

        Capital expenditures totaled $27.5 million and $25.9 million in the first quarter of 2004 and 2003, respectively. During the first quarter of 2004, we purchased eight MRI systems and four PET/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 2004 and to finance substantially all of these purchases with our available cash, cash from operating activities, our revolving line of credit and equipment leases. We expect capital expenditures to total approximately $80 million in 2004.

        We believe that, based on current levels of operations, our cash flow from operating activities, together with other available sources of liquidity, including borrowings available under our revolving loan facility, will be sufficient over the next one to two years to fund anticipated capital expenditures and make required payments of principal and interest on our debt.

Recent Accounting Pronouncements

        In May 2003, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 150, "Accounting for Certain Instruments with Characteristics of Both Liabilities and Equity" ("SFAS 150"), which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS 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. In October 2003, the FASB deferred implementation of paragraphs 9 and 10 of SFAS 150 regarding parent company treatment of minority interest for certain limited life entities and certain other mandatorily redeemable financial instruments. This deferral is for an indefinite period. The adoption of SFAS 150 did not have a material impact on our financial position or results of operations.

        In December 2003, the Securities and Exchange Commission released Staff Accounting Bulletin ("SAB") No. 104, "Revenue Recognition", which supersedes SAB 101, "Revenue Recognition in Financial Statements." SAB 104 clarifies existing guidance regarding revenues for contracts which contain multiple deliverables to make it consistent with Emerging Issues Task Force ("EITF") No. 00-21, "Accounting for Revenue Arrangements with Multiple Deliverables." The adoption of SAB 104 did not have a material impact on our revenue recognition policies, nor our financial position or results of operations.

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,

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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, 2003. 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.

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, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY 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

        On March 3, 2004, we announced that Kenneth S. Ord, our Executive Vice President and Chief Financial Officer, would be retiring from his position with Alliance effective July 1, 2004.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

(a)

Exhibits

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17

(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)

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, 2003.

(11)

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, 2003.

(12)

Filed herewith

(b)

Reports on Form 8-K in the first quarter of 2004:

        On March 3, 2004, we filed a Form 8-K containing a press release issued on March 2, 2004, which sets forth our results of operations for the quarter and year ended December 31, 2003.

        On March 31, 2004, we filed a Form 8-K containing a press release issued on March 30, 2004 announcing the retirement of Kenneth S. Ord, Chief Financial Officer.

18

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.

19

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, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES
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