8-K 1 0001.txt HEALTHTRONICS, INC. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): June 1, 2000 HealthTronics, Inc. (Exact name of the Registrant as specified in its charter) Georgia 333-66977 58-2210668 (State or other jurisdiction of (Commission File Number) (I.R.S. Employer incorporation and organization) identification No.) ------------------------------------------------------------------------------ 1841 West Oak Parkway, Suite A Marietta, Georgia 30062 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: 770-419-0691 2 Item 2. Acquisition or Disposition of Assets. On June 1, 2000, the Company sold the assets purchased from Health Horizons on January 24, 2000 to New Jersey Kidney Stone Center LLC (the "LLC") for $250,000 in cash, a $600,000 note receivable and the assumption of certain liabilities, including lease, trade and accounts payable and obligations under regulatory permits. The assets sold included a lithotripter and related medical equipment, other furniture, equipment, patient records and other related assets used in New Jersey Kidney Stone Treatment Center. The purchase price was determined and negotiated by the parties based on the expected annual cash flow to be generated by the assets purchased. The Company pre-negotiated this sale of its interest in the assets purchased to the LLC which will be managed by the Company and of which the Company will ultimately own less than 20%. The remaining partners will be independent of the Company. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. b. Pro Forma Financial Information The following unaudited combined pro forma financial statements relative to the acquisition for the quarter ended March 31, 2000 is provided herein: (1) Pro Forma Balance Sheets as of March 31, 2000 (2) Pro Forma Statements of Income for the quarter ended March 31, 2000 (3) Notes to the unaudited pro forma financial statements for the quarter ended March 31, 2000 The following unaudited combined pro forma financial statements give effect to the disposition by the Company of certain assets and liabilities, as if the disposition had occurred on January 1 of the period presented. The pro forma adjustments are based upon estimates, currently available information and certain assumptions management deems appropriate. The unaudited combined pro forma financial data presented herein are not necessarily indicative of the results that the Company would have obtained had such events occurred at the beginning of the period, as assumed, or of the future results of the Company. 3 a. Exhibits 2.1 Asset Purchase Agreement dated May 29, 2000 Item 7(b) - Pro Forma Financial Information HealthTronics, Inc. and Subsidiaries Pro Forma Balance Sheets AS OF MARCH 31, 2000 (UNAUDITED)
HISTORICAL -------------- HEALTHTRONICS, INC. DISPOSITION (1) PRO FORMA -------------- --------------- ------------ CURRENT ASSETS Cash and cash equivalents $ 4,013,233 $ 4,013,233 Trade accounts receivable, net 4,688,107 $ 4,688,107 Inventory 2,107,631 $ 2,107,631 Note receivable, current $ 0 Due from affiliated partnerships 168,112 $ 168,112 Vendor deposits 728,813 $ 728,813 Prepaid expenses 107,100 $ 107,100 Deferred income taxes 375,751 $ 375,751 ------------ ------------- ------------ TOTAL CURRENT ASSETS 12,188,747 12,188,747 Property and equipment, at cost: Medical devices placed in service 9,857,187 $ 9,857,187 Office equipment, furniture and fixtures 175,584 $ 175,584 Vehicles and accessories 1,535,577 $ 1,535,577 ------------ ------------- ------------ 11,568,348 11,568,348 Less accumulated depreciation (2,856,847) $ (2,856,847) ------------ ------------- ------------ NET PROPERTY AND EQUIPMENT 8,711,501 8,711,501 Note receivable, noncurrent -- $ 0 Partnership investments 328,402 $ 328,402 Goodwill, net 3,595,258 $ 3,595,258 Patent license 51,674 $ 51,674 Other assets 43,486 $ 43,486 ------------ ------------- ------------ TOTAL ASSETS $ 24,919,068 24,919,068 ============ ============= ============
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HISTORICAL -------------- HEALTHTRONICS, INC. DISPOSITION (1) PRO FORMA -------------- --------------- ------------ CURRENT LIABILITIES Trade accounts payable $ 1,540,729 $ 1,540,729 Customer deposits 749,883 $ 749,883 Income taxes payable 422,791 (111,008) $ 311,783 Warranty accrual 608,403 $ 608,403 Other accrued expenses 857,701 $ 857,701 Deferred profit on service contracts 167,167 $ 167,167 Current portion of long-term debt 1,258,725 $ 1,258,725 ----------- ------------ ------------ TOTAL CURRENT LIABILITIES 5,605,399 (111,008) 5,494,391 Long-term debt, less current portion 2,147,908 $ 2,147,908 Deferred income taxes 12,977 $ 12,977 Deferral of profit on medical device sales to related parties 244,194 $ 244,194 Minority interest 2,246,780 258,159 $ 2,504,939 ----------- ------------ ------------ TOTAL LIABILITIES 10,257,258 147,151 10,404,409 Shareholders' equity: Common stock 12,336,371 $ 12,336,371 Retained earnings 2,325,439 (147,151) $ 2,178,288 ----------- ------------ ------------ TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $24,919,068 $ 24,919,068 =========== ============ ============
(1) The Company sold assets to an LLC in which the Company maintains a 30% financial interest and is the sole manager. Based upon the Company's ability to exercise control over the operating and financial policies of the LLC, the Company intends to consolidate the LLC and as such, the assets sold will be included in the consolidated financial statements of the Company. As a result of this transaction, the pro forma adjustment reflects the transaction from the date of acquisition of the assets (January 24, 2000). 5 HealthTronics, Inc. and Subsidiaries Pro Forma Condensed Statements of Income FOR THE THREE MONTHS ENDED MARCH 31, 2000 (UNAUDITED)
HISTORICAL -------------- HEALTHTRONICS, INC. DISPOSITION (1) PRO FORMA -------------- -------------- ------------ Net revenue $ 7,623,520 $ 7,623,520 Cost of goods sold, rentals and services provided 3,411,119 3,411,119 ------------ -------------- ------------ 4,212,401 4,212,401 General and administrative expenses 2,134,258 2,134,258 ------------ -------------- ------------ 2,078,143 2,078,143 Equity in earnings of unconsolidated partnership 40,508 40,508 Partnership distributions from cost based investments 37,592 37,592 Interest expense (81,905) (81,905) Interest income 58,274 58,274 ------------ -------------- ------------ Income before minority interest and income taxes 2,132,612 2,132,612 Minority interest (1,227,074) (258,159) (1,485,233) ------------ -------------- ------------ Income before income taxes 905,538 (258,159) 647,379 Provision for income taxes (398,804) 111,008 (287,796) ------------ -------------- ------------ Net income $ 506,734 $ (147,151) $ 359,583 ============ ============== ============ Basic and diluted income per common share: Basic $ 0.05 $ 0.03 ============ ============ Diluted $ 0.05 $ 0.03 ============ ============ Weighted average common shares outstanding: Basic 10,719,822 10,719,822 ============ ============ Diluted 11,163,469 11,163,469 ============ ============
(1) The Company sold assets to an LLC in which the Company maintains a 30% financial interest and and is the sole manager. Based upon the Company's ability to exercise control over the operating and financial policies of the LLC, the Company intends to consolidate the LLC and as such, the assets sold will be included in the consolidated financial statements of the Company. As a result of this transaction, the pro forma adjustment reflects the transaction from the date of acquisition of the assets (January 24, 2000). 6 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. HealthTronics, Inc. Dated: June 15, 2000 By: /s/ Victoria W. Beck -------------------------- Victoria W. Beck Chief Financial Officer 7 EXHIBIT INDEX EXHIBIT DESCRIPTION 2.1 Asset Purchase Agreement dated May 29, 2000