-----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, WmHp87PpOojtkw2JBLd13qeOUaWM1O2Y1nwpAico52XEj1zmCd8dynnOq76/aS6B qXlupsIcJN9FSwqjIcZgOQ== 0000950152-98-003375.txt : 19980420 0000950152-98-003375.hdr.sgml : 19980420 ACCESSION NUMBER: 0000950152-98-003375 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980130 ITEM INFORMATION: FILED AS OF DATE: 19980417 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: 8-K/A SEC ACT: SEC FILE NUMBER: 000-27602 FILM NUMBER: 98596691 BUSINESS ADDRESS: STREET 1: 3201 ENTERPRISE PKWY STREET 2: STE 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 8-K/A 1 NCS HEALTHCARE, INC. AMENDMENT TO 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------ FORM 8-K/A-1 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: January 30, 1998 ------------------ (Date of earliest event reported) NCS HEALTHCARE, INC. -------------------- (Exact name of Registrant as specified in its charter) Delaware 0-027602 34-1816187 - ---------------------------- ----------- ---------------- (State or other jurisdiction (Commission (I.R.S. employer of incorporation) file number) identification no.) 3201 Enterprise Parkway, Suite 220, Beachwood, Ohio 44122 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (216) 514-3350 ------------- 2 NCS HealthCare, Inc. hereby amends the following items, financial statements, exhibits or other portions of its Current Report on Form 8-K dated January 30, 1998 as set forth in the pages attached hereto: "Item 7. Financial Statements, Pro Forma Financial Information and Exhibits" is hereby amended and restated to include historical and pro forma financial information required in connection with the acquisition of substantially all of the assets primarily used in the operation of the institutional pharmacy business of Thrift Drug, Inc. and Fay's Incorporated by the Company. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. - ---------------------------------------------------------------------------- (c) Exhibits -------- Exhibit No. Description - ----------- ----------- 23.1 Consent of Ernst & Young LLP 99.1 Financial Statements of Businesses Acquired. -------------------------------------------- Report of Independent Auditors Combined Statement of Assets Acquired and Liabilities Assumed as of January 30, 1998 Combined Statement of Revenues and Direct Expenses for the Year Ended January 30, 1998 Notes to Combined Statements for the Year Ended January 30, 1998 99.2 Unaudited Pro Forma Financial Information. ------------------------------------------ Pro Forma Condensed Consolidated Balance Sheet as of December 31, 1997 Notes to Pro Forma Condensed Consolidated Balance Sheet 3 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. By: /s/ Gerald D. Stethem --------------------------------- Gerald D. Stethem Chief Financial Officer Date: April 17, 1998 EX-23.1 2 EXHIBIT 23.1 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS We consent to the incorporation by reference in the Registration Statements (Form S-8, No. 333-49417; Form S-3/A No. 333-29565 and Form S-3/A No. 333-35551) of NCS HealthCare, Inc. of our report dated March 31, 1998 with respect to the combined statement of assets acquired and liabilities assumed of Thrift Drug, Inc. and Fay's, Incorporated as of January 30, 1998, and the related combined statement of revenues and direct expenses for the year then ended included in the Company's Form 8-K/A-1 dated January 30, 1998. /s/ Ernst & Young LLP Cleveland, Ohio April 15, 1998 EX-99.1 3 EXHIBIT 99.1 1 Exhibit 99.1 Report of Independent Auditors To the Board of Directors and Stockholders of NCS HealthCare, Inc. We have audited the accompanying combined statement of assets acquired and liabilities assumed of Thrift Drug, Inc. ("Thrift") and Fay's, Incorporated ("Fay's") as of January 30, 1998, and the related combined statement of revenues and direct expenses for the year then ended. These statements are the responsibility of Thrift's and Fay's management. Our responsibility is to express an opinion on these statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined statement of assets acquired and liabilities assumed and the related combined statement of revenues and direct expenses are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined statement of assets acquired and liabilities assumed of Thrift and Fay's and the related combined statement of revenues and direct expenses. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the combined statement of assets acquired and liabilities assumed of Thrift and Fay's and the related combined statement of revenues and direct expenses. We believe that our audit provides a reasonable basis for our opinion. The accompanying combined statement of assets acquired and liabilities assumed of Thrift and Fay's and the related combined statement of revenues and direct expenses were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in NCS HealthCare, Inc.'s Form 8-K/A-1 as described in Note 1 and are not intended to be a complete presentation of the financial position and results of operations of Thrift or Fay's. In our opinion, the accompanying combined statements referred to above present fairly, in all material respects, the combined assets acquired and liabilities assumed of Thrift and Fay's as of January 30, 1998, and the related combined revenues and direct expenses for the year ended January 30, 1998, in conformity with generally accepted accounting principles. /s/ Ernst & Young LLP March 31, 1998 F-1 2 Thrift Drug, Inc. and Fay's Incorporated Combined Statement of Assets Acquired and Liabilities Assumed January 30, 1998
ASSETS ACQUIRED Current assets: Accounts receivable, less allowance of $984,000 $13,075,543 Inventory 5,363,594 Other current assets 191,297 ----------- 18,630,434 Net property, plant and equipment 4,201,047 ----------- TOTAL ASSETS ACQUIRED 22,831,481 LIABILITIES ASSUMED Current liabilities: Accrued vacation payable 505,371 Other current liabilities 22,711 ----------- TOTAL LIABILITIES ASSUMED 528,082 ----------- TOTAL ASSETS ACQUIRED AND LIABILITIES ASSUMED, NET $22,303,399 ===========
See accompanying notes. F-2 3 Thrift Drug, Inc. and Fay's Incorporated Combined Statement of Revenues and Direct Expenses For the Year Ended January 30, 1998
Revenues $76,930,953 Direct expenses: Cost of revenues 49,769,745 Salaries and benefits 10,317,461 ----------- EXCESS OF REVENUES OVER DIRECT EXPENSES $16,843,747 ===========
See accompanying notes. F-3 4 Thrift Drug, Inc. and Fay's, Incorporated Notes to Combined Statements Year Ended January 30, 1998 1. SALE OF CERTAIN ASSETS AND BASIS OF PRESENTATION SALE OF CERTAIN ASSETS On January 30, 1998, NCS HealthCare ("NCS") acquired all of the assets primarily used in the operation of the institutional pharmacy business of Thrift Drug, Inc., ("Thrift") and Fay's, Incorporated ("Fay's"), pursuant to the terms of an Asset Purchase Agreement dated December 29, 1997 (the "Agreement"). Thrift and Fay's institutional pharmacy businesses are engaged, among other things, in the business of providing pharmaceuticals, drugs, biologicals, medical devices, and other health or medical supplies and related services to correctional facilities, nursing homes, other institutional care facilities and individuals residing in such facilities. Thrift and Fay's operate in Pennsylvania, North Carolina and New York. BASIS OF PRESENTATION The accompanying combined statement of assets acquired and liabilities assumed of Thrift and Fay's and the related combined statement of revenues and direct expenses were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in NCS's Form 8-K/A-1 requirements and are not intended to be a complete presentation of the financial position and results of operations of Thrift and Fay's. Prior to the purchase, these assets were an integral part of Thrift and Fay's institutional pharmacy businesses, and did not constitute separate legal or reporting entities for which separate financial statements or allocations of corporate overhead costs or other corporate level activities such as cash management and financing were prepared. In addition, operating, investing and financing cash flow activities was not prepared. These assets and results of operations were included in the consolidated financial statements of their parent company, J. C. Penney Company. Due to the omission of various operating overhead and other corporate level expenses and anticipated changes in the business upon integration with NCS, the statements presented are not indicative of the financial condition or results of operations of Thrift and Fay's going forward. F-4 5 Thrift Drug, Inc. and Fay's, Incorporated Notes to Combined Statements--Continued 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REVENUE RECOGNITION Revenue is recognized when products or services are provided to the customer. A significant portion of Thrift and Fay's revenues from sales of pharmaceutical and related products are reimbursable from Medicaid and Medicare programs. Thrift and Fay's monitor their receivables from these reimbursement sources and reports such revenues at the net realizable amount expected to be received from these third-party payors. DIRECT EXPENSES Direct expenses include the cost of products sold and salaries and benefits of Thrift and Fay's personnel to process and distribute products sold. No amounts have been allocated for insurance, interest, depreciation, provision for bad debts, income taxes or any selling, general or administrative costs. BASIS OF ACCOUNTING These statements have been prepared on the accrual basis of accounting in conformity with generally accepted accounting principles. INVENTORIES Inventories of Thrift and Fay's consist primarily of purchased pharmaceuticals and medical supplies and are stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method. PROPERTY, PLANT AND EQUIPMENT Property and equipment are stated at cost. Depreciation on property, plant and equipment is computed using the straight-line method over the estimated useful lives of the assets are as follows: Software and computer equipment 3 - 5 years Machinery and equipment 10 years Furniture and fixtures 10 years
USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and direct expenses during the reported period. Actual results could differ from those estimates. F-5 EX-99.2 4 EXHIBIT 99.2 1 EXHIBIT 99.2 UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION The following unaudited Pro Forma Condensed Consolidated Balance Sheet of NCS HealthCare, Inc. (the "Company") as of December 31, 1997 gives effect to the acquisition of substantially all of the assets primarily used in the operation of the institutional pharmacy business of Thrift Drug, Inc. and Fay's Incorporated (the "Sellers") as if it had occurred as of December 31, 1997. The combined balance sheet of the acquired companies is based on the historical financial information of the acquired companies as of the acquisition closing date adjusted for purchase accounting adjustments. The acquisition was accounted for under the purchase method of accounting. The total purchase price was allocated to the assets and liabilities acquired based on their estimated fair values at the date of acquisition. The excess of cost over the fair value of the net assets acquired was recorded as goodwill. The allocation of the purchase price may be adjusted to the extent that actual amounts differ from current estimates. The Company does not expect that any adjustments would have a material impact on the pro forma information. The pro forma information has been prepared by the Company based on the consolidated balance sheet of the Company included in the December 31, 1997 Form 10-Q and the Combined Statement of Assets Acquired and Liabilities Assumed of the Sellers included herein. The pro forma information is presented for illustration purposes only and does not purport to be indicative of the combined financial condition at December 31, 1997. NCS HEALTHCARE, INC. AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (1) UNAUDITED DECEMBER 31, 1997 (IN THOUSANDS) ASSETS
Historical ------------------------- Pro Forma Pro Forma NCS HealthCare Sellers Adjustments Adjusted -------------- ------- ----------- -------- Current Assets: Cash and cash equivalents $ 49,012 $ -- $(25,715)(b) $ 23,297 Accounts receivable, less allowances 95,571 13,076 -- 108,647 Inventories 29,496 5,364 -- 34,860 Other 8,851 190 -- 9,041 -------- -------- -------- -------- Total current assets 182,930 18,630 (25,715) 175,845 Property, plant and equipment, net 31,050 4,201 (2,280)(a) 32,971 Goodwill, less accumulated amortization 201,359 -- 63,692(a) 265,051 Other assets 16,329 -- -- 16,329 -------- -------- -------- -------- Total assets $431,668 $ 22,831 $ 35,697 $490,196 ======== ======== ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Line of credit $ -- $ -- $ 58,000(b) $ 58,000 Accounts payable 17,619 -- -- 17,619 Accrued expenses and other liabilities 29,434 528 -- 29,962 -------- -------- -------- -------- Total current liabilities 47,053 528 58,000 105,581 Long-term debt 8,760 -- -- 8,760 Convertible subordinated debentures 102,753 -- -- 102,753 Other 591 -- -- 591 Stockholders Equity: Preferred stock, par value $.01 per share Common stock, par value $.01 per share Class A 123 -- -- 123 Class B 69 -- -- 69 Paid-in capital 247,323 -- -- 247,323 Retained earnings 24,996 -- -- 24,996 -------- -------- -------- -------- Total stockholders' equity 272,511 -- -- 272,511 -------- -------- -------- -------- Total liabilities and stockholders' equity $431,668 $ 528 $ 58,000 $490,196 ======== ======== ======== ========
(1) See accompanying Notes to Pro Forma Condensed Consolidated Balance Sheet 2 NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET DECEMBER 31, 1997 (a) On January 30, 1998, NCS HealthCare, Inc. (the "Company") completed the acquisition of substantially all of the assets primarily used in the operation of the institutional pharmacy business of Thrift Drug, Inc. and Fay's Incorporated (the "Sellers") for a cash purchase price of $83,715,000. The acquisition was accounted for under the purchase method of accounting. The total purchase price was allocated to the assets and liabilities acquired based on their estimated fair values at the date of acquisition. The excess of the acquitision cost over the fair value of the net assets acquired was recorded as goodwill. For purposes of the unaudited pro forma balance sheet, the acquisition and related purchase accounting is assumed to have been recorded as of December 31, 1997. (b) On the closing date, the Company drew down $58,000,000 from its $135,000,000 credit facility to fund the cash purchase price of the acquisition. The remainder of the purchase price was paid from available funds. -----END PRIVACY-ENHANCED MESSAGE-----