-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HbphSRIWH28MCc+JorpaszLU6sPiF4jshU0KPbDLrw9QNk1Ay28O8YW/OkO1+rOE Ood8keAGEVF9ugDaPk1FDg== 0000950152-97-008078.txt : 19971117 0000950152-97-008078.hdr.sgml : 19971117 ACCESSION NUMBER: 0000950152-97-008078 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NCS HEALTHCARE INC CENTRAL INDEX KEY: 0001004990 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DRUG STORES AND PROPRIETARY STORES [5912] IRS NUMBER: 341816187 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-27602 FILM NUMBER: 97720367 BUSINESS ADDRESS: STREET 1: 3201 ENTERPRISE PARKWAY STREET 2: SUITE 2200 CITY: BEACHWOOD STATE: OH ZIP: 44122 MAIL ADDRESS: STREET 1: 1400 MCDONALD INVESTMENT CENTER STREET 2: 800 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114 10-Q 1 NCS HEALTHCARE, INC. QUARTERLY REPORT FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 UNITED STATES FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended September 30, 1997 Commission File Number- 0-27602 ------- NCS HealthCare, Inc. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware No. 34-1816187 - ------------------------------- ------------------------------------- (State or other jurisdiction of (IRS employer identification number) incorporation or organization) 3201 Enterprise Parkway, Suite 220, Beachwood, Ohio 44122 - --------------------------------------------------------- (Address of principal executive offices and zip code) (216) 514-3350 - ---------------------------------------------------- (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 requirement for the past 90 days. Yes X No ----- ----- Common Stock Outstanding - ------------------------ Indicate the number of shares outstanding of each of the Issuers' classes of common stock, as of the latest practical date. Class A Common Stock, $ .01 par value -- 11,709,473 shares as of November 7, 1997 Class B Common Stock, $ .01 par value -- 7,018,824 shares as of November 7, 1997 1 2
NCS HEALTHCARE, INC. AND SUBSIDIARIES INDEX Page ---- Part I. Financial Information: Item 1. Financial Statements (Unaudited) Condensed Consolidated Balance Sheets- September 30, 1997 and June 30, 1997 3 Condensed Consolidated Statements of Income- Three months ended- September 30, 1997 and 1996 4 Condensed Consolidated Statements of Cash Flows- Three months ended- September 30, 1997 and 1996 5 Notes to Condensed Consolidated Financial Statements - September 30, 1997 6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 8 Part II. Other Information: Item 2. Changes in Securities 10 Item 6. Exhibits and Reports on Form 8-K 10 Signatures 11
2 3 ITEM 1. FINANCIAL STATEMENTS NCS HEALTHCARE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE INFORMATION)
(Unaudited) (Note A) September 30, June 30, ASSETS 1997 1997 ------------- --------- Current Assets: Cash and cash equivalents $ 69,007 $ 8,160 Accounts receivable, less allowances 84,803 70,476 Inventories 24,902 22,281 Other 8,158 6,570 -------- -------- Total current assets 186,870 107,487 Property and equipment, at cost net of accumulated depreciation and amortization 26,738 23,309 Goodwill, less accumulated amortization 195,750 180,723 Other assets 13,031 9,511 -------- -------- Total assets $422,389 $321,030 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Line of credit $ - $ 10,285 Accounts payable 16,064 15,054 Accrued expenses and other liabilities 29,659 28,984 -------- -------- Total current liabilities 45,723 54,323 Long-term debt 8,982 8,043 Convertible subordinated debentures 103,678 4,813 Other 611 625 Stockholders' Equity: Preferred stock, par value $ .01 per share, 1,000,000 shares authorized; none issued - - Common stock, par value $ .01 per share: Class A - 50,000,000 shares authorized; 11,709,473 and 11,313,638 shares issued and outstanding at September 30, 1997 and June 30, 1997, respectively 117 113 Class B - 20,000,000 shares authorized; 7,018,824 and 6,742,742 shares issued and outstanding at September 30, 1997 and June 30, 1997, respectively 70 67 Paid-in capital 242,233 235,703 Retained earnings 20,975 17,343 -------- -------- Total stockholders' equity 263,395 253,226 -------- -------- Total liabilities and stockholders' equity $422,389 $321,030 ======== ======== Note A: The balance sheet at June 30, 1997 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See notes to condensed consolidated financial statements.
3 4 NCS HEALTHCARE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
Three Months Ended September 30, --------------------------------- 1997 1996 --------------------------------- Revenues $103,711 $43,042 Cost of revenues 77,485 31,854 --------------------------------- Gross profit 26,226 11,188 Selling, general and administrative expenses 19,353 7,654 --------------------------------- Operating income 6,873 3,534 Interest expense, net 501 123 --------------------------------- Income before income taxes 6,372 3,411 Income tax expense 2,740 1,501 --------------------------------- Net income $ 3,632 $ 1,910 ================================= Net income per share $ 0.20 $ 0.15 ================================= Shares used in the computation 18,597 12,594
See notes to condensed consolidated financial statements. 4 5
NCS HEALTHCARE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS) Three Months Ended September 30, ----------------------------------- 1997 1996 ----------------------------------- OPERATING ACTIVITIES Net income $ 3,632 $ 1,910 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 3,302 1,291 Changes in assets and liabilities, net of effects of assets and liabilities acquired: Accounts receivable, net (12,849) (764) Accrued expenses and other liabilities 1,437 3,139 Other, net (3,745) (960) ----------------------------------- Net cash provided by (used in) operating activities (8,223) 4,616 INVESTING ACTIVITIES Purchases of businesses (12,161) (25,775) Capital expenditures for property and equipment, net (4,239) (1,269) Other (1,180) (1,151) ----------------------------------- Net cash used in investing activities (17,580) (28,195) FINANCING ACTIVITIES Proceeds from convertible subordinated debentures, net 97,250 - Borrowings on line-of-credit 21,499 7,095 Payments on line-of-credit (31,784) - Repayment of long-term debt (658) (97) Proceeds from issuance of long-term debt 343 537 ----------------------------------- Net cash provided by financing activities 86,650 7,535 ----------------------------------- Net increase (decrease) in cash and cash equivalents 60,847 (16,044) Cash and cash equivalents at beginning of period 8,160 21,460 ----------------------------------- Cash and cash equivalents at end of period $ 69,007 $ 5,416 =================================== See notes to condensed consolidated financial statements.
5 6 NCS HEALTHCARE, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (UNAUDITED) 1. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. 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 three month period ended September 30, 1997 are not necessarily indicative of the results that may be expected for the year ending June 30, 1998. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Form 10-K for the year ended June 30, 1997 (File No. 0-27602). 2. On October 4, 1996, the Company completed a public offering of 4,235,000 shares of Class A Common Stock at $31 per share. The offering raised approximately $123,600,000 (net of underwriting discounts and expenses). A portion of the net proceeds from the stock issuance was used to repay approximately $7,000,000 of outstanding indebtedness under short-term borrowings. 3. On August 13, 1997, the Company issued $100,000,000 of convertible subordinated debentures (debentures) due 2004. Net proceeds to the Company were approximately $97,250,000, net of underwriting discounts and expenses. The debentures carry an interest rate of 5 3/4% and are convertible into shares of Class A Common Stock. A portion of the proceeds from the debenture offering was used to repay approximately $21,000,000 of outstanding indebtedness under short-term borrowings. The debentures are obligations of the Company. The operations of the Company are currently conducted principally through subsidiaries, which are separate and has distinct legal entities. Each of the Company's wholly-owned subsidiaries has unconditionally guaranteed, jointly and severally, the Company's payment obligations under the debentures. Accordingly, summarized financial information regarding the guarantor subsidiaries has not been presented because management of the Company believes that such information would not be meaningful to investors. In July 1997, $1,135,000 of 8% convertible subordinated debentures due in 1998 were converted into 112,890 shares of Class A Common Stock. During August 1997, the Company entered into a $135,000,000 credit facility expiring July 2000. 4. Significant acquisitions completed by the Company during the three months ended September 30, 1997 include Cheshire LTC Pharmacy, Inc. in Cheshire, Connecticut and PharmaSource Healthcare, Inc. in Norcross, Georgia. The aggregate purchase price for all businesses acquired during the three months ended September 30, 1997 was $18,164,000 consisting of $12,161,000 in cash, $600,000 of debt and $5,403,000 of Class A Common Stock of the Company. The Cheshire LTC Pharmacy, Inc. acquisition was accounted for as a pooling of interests transaction, however the impact of this transaction on the Company's historical financial statements is not significant. Consequently, prior period financial statements have not been restated for this transaction. Significant acquisitions completed by the Company during fiscal 1997 include Advanced Rx Services, Inc. in Northfield, New Jersey, IPAC Pharmacy, Inc. in Portland, Oregon, Medical Arts Pharmacy in Grand Rapids, Michigan, Northside Pharmacy, Inc. and Thrifty Medical Supply, Inc. in Oklahoma City, Oklahoma, Thrifty Medical of Tulsa L.L.C. in Tulsa, Oklahoma, Hudson Pharmacy of Wichita, Inc. in Wichita, Kansas, Spectrum Health Services, Inc. in Tampa, Florida, Clinical Health Systems in Vancouver, Washington, Rescot Systems Group, Inc. in Philadelphia, Pennsylvania, W.P. Malone, Inc. in Arkadelphia, Arkansas, Long Term Care Pharmacy Services in East Greenwich, Rhode Island, Eakles Drug Store, Inc. in Hagerstown, Maryland, Pharmacare in 6 7 Glendale, California, Advanced Pharmaceutical Services, Inc. in Tujunga, California, Dahlin Pharmacy, Inc. in Paramount, California, Stoll Services, Inc. in Modesto, California, Cooper Hall Pharmacy, Inc. in Mount Pleasant, South Carolina, Hammer Incorporated in Des Moines, Iowa, Daven Drug in Los Angeles, California, Medi-Centre Pharmacy in Lansing, Michigan, Vangard Labs, Inc. in Glasgow, Kentucky, Long Term Care, Inc. in Williston, Vermont, Look Drug Store, Inc. in Kaukauna, Wisconsin and HLF Adult Home Pharmacy in Rochester, New York. The aggregate purchase price for all businesses acquired during fiscal 1997 was $166,376,000 consisting of $137,080,000 in cash, $3,804,000 of debt and $25,492,000 of Class A Common Stock of the Company. Unaudited pro forma data, as though the Company had completed its October 4, 1996 public offering and had purchased each of these businesses as of July 1, 1996, are set forth below:
Three Months Three Months Ended Ended September 30, 1997 September 30, 1996 ------------------ ------------------ (In thousands, except per share information) Revenues $ 108,937 $ 91,674 Net income $ 3,693 $ 2,900 Net income per common share $ 0.20 $ 0.16
7 8 NCS HEALTHCARE, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION THREE MONTHS ENDED SEPTEMBER 30, 1997 Results of Operations Revenues for the three months ended September 30, 1997 increased 141.0% to $103,711,000 from $43,042,000 recorded in the comparable period in fiscal 1997. The increase in revenues during the first quarter of fiscal 1998 over the comparable prior year period is primarily attributed to two factors: the Company's acquisition program and internal growth. Of the $60,669,000 increase for the three months ended September 30, 1997, $898,000 was due to the acquisitions of Cheshire LTC Pharmacy, Inc. in August 1997 and PharmaSource Healthcare, Inc. in September 1997. In addition, $43,465,000 of the increase is attributable to revenues for the first three months of fiscal 1998 including a full period of operations for fiscal 1997 acquisitions. These fiscal 1997 acquisitions include Advanced Rx Services, Inc. in July 1996, IPAC Pharmacy, Inc., Medical Arts Pharmacy, Northside Pharmacy Inc., Med-Equip, Thrifty Medical Supply, Inc. and Thrifty Medical of Tulsa L.L.C. in August 1996, Hudson Pharmacy of Wichita, Inc. in September 1996, Spectrum Health Services, Inc. in October 1996, Clinical Health Systems in November 1996, Rescot Systems Group, Inc., W.P. Malone, Inc., Long Term Care Pharmacy Services and Eakles Drug Store, Inc. in January 1997, Pharmacare, Advanced Pharmaceutical Services, Inc. and Dahlin Pharmacy, Inc. in February 1997, Stoll Services, Inc., Cooper Hall Pharmacy, Inc., Hammer Incorporated, Daven Drug, and Medi-Centre Pharmacy in March 1997, Vanguard Labs, Inc. in April 1997, Long Term Care, Inc. in May 1997 and Look Drug Store, Inc. and HLF Adult Home Pharmacy in June 1997. Internal growth accounted for $16,306,000 of the increase as the Company's existing operations continued to grow through marketing efforts to new and existing clients, increased drug utilization of long-term care facility residents, and the growth and integration of new and existing products and services. The total number of beds serviced by the Company as of September 30, 1997 increased 92% to 165,000 beds, from 86,000 beds at September 30, 1996. Cost of revenues for the three months ended September 30, 1997 increased 143.3% to $77,485,000, from $31,854,000 recorded in the comparable period in fiscal 1997. Cost of revenues as a percentage of revenues for the three month period ended September 30, 1997 was 74.7%, compared to 74.0% during the prior fiscal year. The increase in cost of revenues as a percentage of revenues is primarily the result of acquisitions because at the time of acquisition, the gross margins of the acquired companies are typically lower than the Company as a whole. This is the result of several factors, including less advantageous purchasing terms, lack of formulary management and higher production costs. Selling, general and administrative expenses for the three months ended September 30, 1997 increased 152.8% to $19,353,000, from $7,654,000 recorded in the comparable period in fiscal 1997. Selling, general and administrative expenses as a percentage of revenues was 18.7% for the three month period ended September 30, 1997, compared to 17.8% during the comparable period in fiscal 1997. The percentage increase for the three month period ended September 30, 1997 is primarily the result of acquisitions because at the time of acquisition, the selling, general and administrative expenses of the acquired companies are typically higher than the Company as a whole. The Company has been successful at creating operational efficiencies with acquisitions as selling, general and administrative expenses as a percentage of revenues decreased for the third straight quarter. The increase in selling, general, and administrative expenses in absolute dollars is mainly attributable to expenses associated with the operations of businesses acquired during the current and prior fiscal year. The Company had net interest expense of $501,000 for the three months ended September 30, 1997, compared to net interest expense of $123,000 in the comparable period in fiscal 1997. The increase is primarily attributable to the reduction of long-term debt during the prior year with funds from the Company's initial public offering completed on February 14, 1996 and additional interest expense incurred in the current year on $100,000,000 of convertible subordinated debentures issued by the Company in August 1997. 8 9 Liquidity and Capital Resources Net cash used in operating activities was $8,223,000 for the three months ended September 30, 1997, as compared to net cash provided by operating activities of $4,616,000 during the comparable period in fiscal 1997. Net cash used in operating activities increased from the comparable period in fiscal 1997 primarily due to an increase in accounts receivable and inventory. The increase in accounts receivable and inventory is mainly attributable to a 10.2% increase in sales during the three months ended September 30, 1997, as compared to the three months ended June 30, 1997. Net cash used in investing activities decreased to $17,580,000 during the three months ended September 30, 1997, as compared to $28,195,000 during the comparable period in fiscal 1997. The decrease is primarily the result of a decrease in cash used for acquisitions, partially offset by an increase in capital expenditures. Significant capital expenditures during the three months ended September 30, 1997 included computer and information systems equipment, computer software, furniture and fixtures at a new facility in Pinellas Park, Florida, leasehold improvements, medication carts and delivery vehicles. Net cash provided by financing activities increased to $86,650,000 during the three months ended September 30, 1997, from $7,535,000 during the comparable period in fiscal 1997. The increase is primarily the result of funds received from a convertible subordinated debenture offering completed on August 13, 1997. The Company's future cash requirements and cash flow expectations are closely related to its expansion plans. In August 1997, the Company issued $100,000,000 of convertible subordinated debentures due 2004. The debentures carry an interest rate of 5 3/4%. The debentures are obligations of the Company. The operations of the Company are currently conducted principally through subsidiaries, which are separate and distinct legal entities. The Company's ability to make payments of principal and interest on the debentures will depend on its ability to receive distributions of cash from its subsidiaries. Each of the Company's wholly-owned subsidiaries has guaranteed the Company's payment obligations under the debentures, so long as such subsidiary is a member of an affiliated group (within the meaning of Section 279(g) of the Internal Revenue Code of 1986, as amended) which includes the Company. The satisfaction by the Company's subsidiaries of their contractual guarantees, as well as the payment of dividends and certain loans and advances to the Company by such subsidiaries, may be subject to certain statutory or contractual restrictions, are contingent upon the earnings of such subsidiaries and are subject to various business considerations. Also in August 1997, the Company entered into a $135,000,000 credit facility expiring July 2000. The Company believes that its cash and available sources of capital, including proceeds from the issuance of the debentures and funds available under the credit facility, are sufficient to meet its normal operating requirements and acquisition needs through June 30, 1999. New Accounting Standards In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings per Share" (FASB 128) which establishes new standards for computing and presenting earnings per share. FASB 128 will be effective for the Company's December 31, 1997 financial statements and will require a restatement of prior periods presented; earlier application is not permitted. Under the new requirements, primary earnings per share will be replaced by a more simply calculated basic earnings per share which will not include the impact of any potentially dilutive securities. Diluted earnings per share will be required to be disclosed and will be calculated using a methodology not significantly different from that presently used to calculate fully diluted earnings per share. The impact of the statement on earnings per share for the quarters presented is not expected to be material. 9 10 Factors That May Affect Future Results Except for historical financial information contained in this Form 10-Q, the statements made in this report are forward-looking statements. Factors that may cause actual results to differ materially from those in the forward-looking statements include the availability and cost of attractive acquisition candidates, continuation of various trends in the long-term care market (including the trend toward consolidation), competition among providers of long-term care pharmacy services, the availability of capital for acquisitions and capital requirements, changes in regulatory requirements and reform of the health care delivery system. 10 11 ITEM 2. CHANGES IN SECURITIES The following information is furnished as to all equity securities of the Company sold during the first fiscal quarter that were not registered under the Securities Act of 1933, as amended (the "Securities Act"). (a) On July 1, 1997 the Company issued 3,292 shares of its Class A Common Stock to one stockholder in connection with the acquisition of certain assets of New England Pharmacy, Inc. Exemption from registration is claimed under Section 4(2) of the Securities Act. (b) On July 28, 1997 the Company issued 65,775 shares of its Class A Common Stock to one stockholder in connection with the conversion of a Non-Negotiable 8% Convertible Promissory Note. Exemption from registration is claimed under Section 3(a)(9) of the Securities. (c) On July 30, 1997 the Company issued 35,000 shares of its Class A Common Stock to five stockholders in connection with the acquisition of certain assets of VMI Software, Inc. Exemption from registration is claimed under Section 4(2) of the Securities Act. (d) On July 31, 1997 the Company issued 2,648 shares of its Class A Common Stock to one stockholder in connection with the conversion of a Non-Negotiable 8% Convertible Promissory Note. Exemption from registration is claimed under Section 3(a)(9) of the Securities. (e) On July 31, 1997 the Company issued 43,142 shares of its Class A Common Stock to one stockholder in connection with the conversion of a Non-Negotiable 8% Convertible Promissory Note. Exemption from registration is claimed under Section 3(a)(9) of the Securities. (f) On July 31, 1997 the Company issued 1,325 shares of its Class A Common Stock to one stockholder in connection with the conversion of a Non-Negotiable 8% Convertible Promissory Note. Exemption from registration is claimed under Section 3(a)(9) of the Securities (g) On August 1, 1997 the Company issued 276,082 shares of its Class B Common Stock to four stockholders in connection with the merger of Cheshire LTC Pharmacy, Inc. Exemption from registration is claimed under Section 4(2) of the Securities Act. (h) On August 13, 1997 the Company issued $100,000,000 of convertible subordinated debentures due 2004. Exemption from registration is claimed under Section 4(2) of the Securities Act. (i) On September 19, 1997 the Company issued 244,653 shares of its Class A Common Stock to sixteen stockholders in connection with the acquisition of certain assets of PharmaSource Healthcare, Inc. Exemption from registration is claimed under Section 4(2) of the Securities Act. 11 12 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit Numbers Exhibit ------- ------- 4.1 Form of Convertible Subordinated Debenture due September 30, 1996. (A) 4.2 Indenture, dated August 13, 1997, between the Company and National City Bank, As Trustee. (B) 4.3 Form of 53/4% Convertible Subordinated Debentures due 2004. (B) 10.1 Credit Agreement, dated August 1, 1997, by and among the Company, the lending institutions named therein and KeyBank National Association, as Administrative Agent. (B) 11 Computation of Earnings Per Common Share 15 Independent Accountants' Review Report 27 Financial Data Schedule (A) Incorporated herein by reference to the appropriate exhibit to the Company's Registration Statement on Form S-1 (Reg. No.33-80455). (B) Incorporated herein by reference to the appropriate exhibit to the Company's Registration Statement on Form S-3, as amended (Reg. No. 333-35551). (b) Reports on Form 8-K: No reports on Form 8-K were filed during the three months ended September 30, 1997. 12 13 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. NCS HealthCare, Inc. (Registrant) Date: November 14, 1997 By /s/ Kevin B. Shaw --------------------------------------- Kevin B. Shaw President, Chief Executive Officer and Director (Principal Executive Officer) Date: November 14, 1997 By /s/ Jeffrey R. Steinhilber ---------------------------------------- Jeffrey R. Steinhilber Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 13 EX-11 2 EXHIBIT 11 1 EXHIBIT 11 NCS HEALTHCARE, INC. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER COMMON SHARE (IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
Three Months Ended September 30, ------------------------------- 1997 1996 ------------------------------- Net income used in calculation of primary earnings per share $ 3,632 $ 1,910 Add impact of assumed conversion of subordinated debentures 469 71 ------------------------------- Net income used in calculation of fully diluted earnings per share $ 4,101 $ 1,981 =============================== Weighted average common shares outstanding 18,354 12,407 Net effect of dilutive stock options 243 187 ------------------------------- Shares used in calculation of primary earnings per share 18,597 12,594 Add impact of assumed conversion of subordinated debentures 2,025 654 ------------------------------- Shares used in calculation of fully diluted earnings per share 20,622 13,248 =============================== Primary net income per share $ 0.20 $ 0.15 =============================== Fully diluted net income per share- Note A $ 0.20 $ 0.15 =============================== NOTE A -- Fully dilutive net income per share has not been presented in the Condensed Consolidated Statements of Income because the effect is either immaterial or anti-dilutive.
EX-15 3 EXHIBIT 15 1 EXHIBIT 15 INDEPENDENT ACCOUNTANTS' REVIEW REPORT The Board of Directors and Stockholders NCS HealthCare, Inc. and Subsidiaries We have reviewed the accompanying condensed consolidated balance sheet of NCS HealthCare, Inc. and subsidiaries (the Company) as of September 30, 1997, and the related condensed consolidated statements of income and cash flows for the three-month periods ended September 30, 1997 and 1996. These financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of NCS HealthCare, Inc. and subsidiaries as of June 30, 1997, and the related consolidated statements of income, stockholders' equity and cash flows for the year then ended, not presented herein, and in our report dated August 1, 1997, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of June 30, 1997 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. Cleveland, Ohio /s/ Ernst & Young LLP October 28, 1997 EX-27 4 EXHIBIT 27
5 0001004990 N/A 1,000 U.S. DOLLARS 3-MOS JUN-30-1998 JUL-01-1997 SEP-30-1997 1 69,007 0 102,901 18,098 24,902 186,870 46,473 19,735 422,389 45,723 113,418 0 0 187 263,208 422,389 103,711 103,711 77,485 77,485 0 490 1,235 6,372 2,740 3,632 0 0 0 3,632 .20 .20
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