EX-99 4 ex99-2.txt EXHIBIT 99.2 Exhibit 99.2 NCS HEALTHCARE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share information)
(Unaudited) (Note A) December 31, June 30, 2002 2002 --------- --------- ASSETS Current Assets: Cash and cash equivalents $ 30,651 $ 42,539 Accounts receivable, less allowances 82,410 85,808 Inventories 28,714 30,593 Other 3,546 2,863 --------- --------- Total current assets 145,321 161,803 Property and equipment, at cost net of accumulated depreciation and amortization 24,899 28,118 Goodwill 84,398 80,487 Other assets 5,859 7,385 --------- --------- Total assets $ 260,477 $ 277,793 ========= ========= LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities: Line of credit in default $ 206,130 $ 206,130 Convertible subordinated debentures in default 102,514 102,361 Accounts payable 45,770 45,336 Accrued expenses and other liabilities 38,307 31,406 --------- --------- Total current liabilities 392,721 385,233 Long-term debt, excluding current portion 416 549 Other 39 73 Stockholders' Deficit: 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; 18,543,101 and 18,461,599 shares issued and outstanding at December 31, 2002 and June 30, 2002, respectively 185 184 Class B - 20,000,000 shares authorized; 5,208,707 and 5,255,210 shares issued and outstanding at December 31, 2002 and June 30, 2002, respectively 52 53 Paid-in capital 272,018 271,943 Accumulated deficit (404,954) (380,242) --------- --------- Total stockholders' deficit (132,699) (108,062) --------- --------- Total liabilities and stockholders' deficit $ 260,477 $ 277,793 ========= =========
Note A: The balance sheet at June 30, 2002 has been derived from the audited consolidated 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. NCS HEALTHCARE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED (In thousands, except per share information)
Three Months Ended Six Months Ended December 31, December 31, 2002 2001 2002 2001 --------- --------- --------- --------- Revenues $ 165,832 $ 161,708 $ 329,585 $ 319,544 Cost of revenues 138,922 135,327 277,143 265,983 --------- --------- --------- --------- Gross profit 26,910 26,381 52,442 53,561 Selling, general and administrative expenses 41,546 25,089 64,307 50,420 --------- --------- --------- --------- Operating income (loss) (14,636) 1,292 (11,865) 3,141 Interest expense, net 6,702 6,456 12,726 13,409 --------- --------- --------- --------- Loss before income taxes and cumulative effect of accounting change (21,338) (5,164) (24,591) (10,268) Income tax expense 60 75 120 150 --------- --------- --------- --------- Loss before cumulative effect of accounting change (21,398) (5,239) (24,711) (10,418) Cumulative effect of accounting change -- -- -- (222,116) --------- --------- --------- --------- Net loss $ (21,398) $ (5,239) $ (24,711) $(232,534) ========= ========= ========= ========= Net loss per common share before cumulative effect of accounting change - basic and diluted $ (0.90) $ (0.22) $ (1.04) $ (0.44) Cumulative effect of accounting change -- -- -- (9.37) Net loss per common share - basic and diluted $ (0.90) $ (0.22) $ (1.04) $ (9.80) ========= ========= ========= ========= Weighted average number of common shares outstanding - basic and diluted 23,721 23,717 23,719 23,717 ========= ========= ========= =========
See notes to condensed consolidated financial statements. 2 NCS HEALTHCARE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED (In thousands)
Six Months Ended December 31, 2002 2001 --------- --------- Operating activities Net loss $ (24,711) $(232,534) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Cumulative effect of accounting change -- 222,116 Depreciation and amortization 6,136 6,574 Changes in assets and liabilities: Accounts receivable, net 2,194 (1,026) Accrued expenses and other liabilities 8,232 6,302 Other, net 1,490 424 --------- --------- Net cash (used in) provided by operating activities (6,659) 1,856 --------- --------- Investing activities Purchases of businesses (4,170) -- Capital expenditures for property and equipment, net (2,283) (2,728) Other 1,266 (120) --------- --------- Net cash used in investing activities (5,187) (2,848) --------- --------- Financing activities Repayment of long-term debt (115) (276) Proceeds from exercise of stock options 73 -- --------- --------- Net cash used in financing activities (42) (276) --------- --------- Net decrease in cash and cash equivalents (11,888) (1,268) Cash and cash equivalents at beginning of period 42,539 39,464 --------- --------- Cash and cash equivalents at end of period $ 30,651 $ 38,196 ========= =========
See notes to condensed consolidated financial statements. 3 NCS HEALTHCARE, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2002 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. For further information, refer to the consolidated financial statements and footnotes thereto included in NCS HealthCare, Inc.'s Form 10-K for the year ended June 30, 2002. 2. On December 15, 2002, Genesis Health Ventures, Inc. ("Genesis") and Omnicare, Inc. ("Omnicare") entered into a Termination and Settlement Agreement, whereby Genesis agreed to terminate its previously disclosed Agreement and Plan of Merger with NCS HealthCare, Inc. ("NCS") effective December 16, 2002. On January 15, 2003, Omnicare closed its $5.50 per share cash tender offer for all of the outstanding shares of Class A common stock and Class B common stock of NCS. In connection with the transaction, Omnicare paid cash consideration totaling approximately $469 million for all of the then-outstanding NCS shares and all NCS debt in default, plus accrued interest. Promptly following the closing of the merger, NCS Class A common stock was delisted from the Over-The-Counter Bulletin Board and is no longer publicly traded. 3. The following table sets forth the computation of basic and diluted earnings per share in accordance with Statement of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS No. 128):
Three Months Ended Six Months Ended December 31, December 31, ---------------------- ---------------------- 2002 2001 2002 2001 ---------------------- ---------------------- (in thousands, except per share information) Numerator: Numerator for basic earnings per share - net loss $ (21,398) $ (5,239) $ (24,711) $(232,534) Effect of dilutive securities: Convertible debentures -- -- -- -- ---------------------- ---------------------- Numerator for diluted earnings per share $ (21,398) $ (5,239) $ (24,711) $(232,534) ====================== ====================== Denominator: Denominator for basic earnings per share - weighted average common shares 23,721 23,717 23,719 23,717 ---------------------- ---------------------- Effect of dilutive securities: Stock options -- -- -- -- Convertible debentures -- -- -- -- ---------------------- ---------------------- Dilutive potential common shares -- -- -- -- ---------------------- ---------------------- Denominator for diluted earnings per share 23,721 23,717 23,719 23,717 ====================== ====================== Basic and diluted earnings per share: Loss before cumulative effect of accounting change $ (0.90) $ (0.22) $ (1.04) $ (0.44) Cumulative effect of accounting change -- -- -- (9.37) Net loss per share $ (0.90) $ (0.22) $ (1.04) $ (9.80) ====================== ======================
4 At December 31, 2002 and 2001, NCS had 2,434,716 and 1,954,798, respectively, of employee stock options that are potentially dilutive that were not included in the computation of diluted earnings per share as their effect would be antidilutive. NCS had $102.5 million and $102.2 million of convertible subordinated debentures outstanding at December 31, 2002 and 2001, respectively, that were convertible into 3,258,104, shares of Class A common stock, that were not included in the computation of diluted earnings per share as their effect would be antidilutive for all periods presented. 4. NCS elected early adoption of Statement of Financial Accounting Standards (SFAS) No. 142 "Goodwill and Other Intangible Assets" effective July 1, 2001. NCS recorded a non-cash charge of $222.1 million to reduce the carrying value of its goodwill as a result of the adoption of SFAS No. 142. In accordance with the requirements of SFAS No. 142, the charge has been recorded as a cumulative effect of accounting change in NCS' fiscal 2002 consolidated statement of operations. 5