-----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, MeyUGiXgedilxKx+IEqJoEinkLtPnPhvtzEeT1oFGeosFNkTp5tpJMhpLvO9Ze4h YD3gwdP9DXvBtbS35mED5A== 0000950152-97-008452.txt : 19971205 0000950152-97-008452.hdr.sgml : 19971205 ACCESSION NUMBER: 0000950152-97-008452 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970912 ITEM INFORMATION: FILED AS OF DATE: 19971204 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OMNICARE INC CENTRAL INDEX KEY: 0000353230 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DRUG STORES AND PROPRIETARY STORES [5912] IRS NUMBER: 311001351 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-08269 FILM NUMBER: 97732356 BUSINESS ADDRESS: STREET 1: 50 E RIVERCENTER BLVD STREET 2: STE 1530 CITY: COVINGTON STATE: KY ZIP: 41011 BUSINESS PHONE: 5137626666 MAIL ADDRESS: STREET 1: 2800 CHEMED CENTER STREET 2: 255 EAST FIFTH ST CITY: CINCINNATI STATE: OH ZIP: 45202-4728 8-K/A 1 OMNICARE, INC. FORM 8-K/AMENDMENT NO. 2 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A (Amendment No. 2) CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): September 12, 1997 OMNICARE, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware ---------------------------------------------- (State or other jurisdiction of incorporation) 1-8269 31-1001351 - ------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 50 East RiverCenter Boulevard, Covington, Kentucky 41011 -------------------------------------------------------- (Address of principal executive offices) (zip code) Registrant's telephone number, including area code: (606) 291-6800 2 Omnicare, Inc. hereby files its amended Form 8-K/A, reflecting changes to the Financial Statements and Exhibits - Pro forma financial information section (Item 7(b)) of the Form 8-K/A originally filed with the Securities and Exchange Commission on September 29, 1997. Item 7. Financial Statement and Exhibits -------------------------------- (b) Pro Forma financial information. 2 3 UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION The unaudited Pro Forma Consolidated Balance Sheet of Omnicare, Inc. (the "Company") as of June 30, 1997 gives effect to the acquisition of American Medserve Corporation ("AMC") as if it had occurred as of June 30, 1997. The unaudited Pro Forma Consolidated Statements of Income of the Company for the year ended December 31, 1996 and for the six months ended June 30, 1997 give effect to the acquisition of AMC as if it had occurred on January 1, 1996. The acquisition of AMC was accounted for under the purchase method of accounting. The total purchase price was allocated to the tangible and identifiable intangible assets, and liabilities based on the Company's management's estimate of their fair values. 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 in accordance with Statement of Financial Accounting Standards No. 38, "Accounting for Preacquisition Contingencies of Purchased Enterprises," to the extent that actual amounts differ from management's current estimates. Management does not expect that any such adjustment would have a material impact on the pro forma information. The pro forma information has been prepared by the Company based on the consolidated financial statements of the Company and AMC included in their respective 1996 Forms 10-K and June 30, 1997 Forms 10-Q. The pro forma information is presented for illustration purposes only and does not purport to be indicative of the combined financial condition or results of operations that actually would have occurred if the acquisition of AMC had been effected at the dates indicated or to project future financial condition or results of operations for any future period. The pro forma information gives effect only to the adjustments set forth in the accompanying notes and does not reflect any synergies anticipated by the Company's management as a result of the acquisition, in particular improvements in gross margin attributable to the Company's purchasing leverage associated with purchases of pharmaceuticals and the elimination of duplicate payroll and other operating expenses. Therefore, management believes that the pro forma financial information is not necessarily indicative of future performance. The pro forma information should be read in conjunction with the Company's consolidated financial statements and related notes thereto included in its 1996 Form 10-K (as amended on Form 10-K/A dated August 6, 1997) and its June 30, 1997 Form 10-Q, and the consolidated financial statements of AMC and related notes thereto included in its 1996 Form 10-K and June 30, 1997 Form 10-Q, which have been incorporated by reference in the Company's current report on Form 8-K dated September 12, 1997. 3 4
Omnicare, Inc. and Subsidiary Companies Pro Forma Consolidated Balance Sheet Unaudited June 30, 1997 (In thousands) Historical ---------------------------- American Pro Forma Pro Forma ASSETS Omnicare Medserve Adjustments Adjusted -------- -------- ----------- ---------- Current assets: Cash and cash equivalents $ 102,995 $ 3,231 $ 480 (b) $ 106,706 Accounts receivable, less allowances 154,616 30,960 -- 185,576 Inventories 67,997 10,572 -- 78,569 Deferred income tax benefits 7,691 -- -- 7,691 Other current assets 13,481 2,971 -- 16,452 Due from related parties -- 1,563 -- 1,563 ----------- ----------- ----------- ----------- Total current assets 346,780 49,297 480 396,557 Properties and equipment, at cost less accumulated depreciation 66,814 7,599 -- 74,413 Goodwill, less accumulated amortization 383,901 73,078 218,677 (a) 602,578 (73,078)(d) Other assets 19,671 3,534 (1,702)(c) 21,503 ----------- ----------- ----------- ----------- Total assets $ 817,166 $ 133,508 $ 144,377 $ 1,095,051 =========== =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 30,076 $ 7,329 $ -- $ 37,405 Amounts payable pursuant to acquisition agreements 16,588 -- -- 16,588 Current portion of long-term debt 1,871 8,900 (7,034)(b) 3,737 Accrued employee compensation 11,448 -- -- 11,448 Other current liabilities 15,606 3,683 8,200 (e) 27,489 ----------- ----------- ----------- ----------- Total current liabilities 75,589 19,912 1,166 96,667 Long-term debt 1,211 13,219 (9,486)(b) 254,944 250,000 (b) Deferred income taxes 6,521 1,102 -- 7,623 Amounts payable pursuant to acquisition agreements 9,098 -- -- 9,098 Other noncurrent liabilities 9,073 1,972 -- 11,045 ----------- ----------- ----------- ----------- Total liabilities 101,492 36,205 241,680 379,377 ----------- ----------- ----------- ----------- Stockholders' equity: Common stock 80,354 122 (122)(f) 80,354 Paid-in capital 492,018 97,347 (97,347)(f) 492,018 Retained earnings (deficit) 163,184 (166) 166 (f) 163,184 ----------- ----------- ----------- ----------- 735,556 97,303 (97,303) 735,556 Treasury stock, at cost (2,058) -- -- (2,058) Deferred compensation (16,675) -- -- (16,675) Unallocated stock of ESOP (1,149) -- -- (1,149) ----------- ----------- ----------- ----------- Total stockholders' equity 715,674 97,303 (97,303) 715,674 ----------- ----------- ----------- ----------- Contingencies Total liabilities and stockholders' equity $ 817,166 $ 133,508 $ 144,377 $ 1,095,051 =========== =========== =========== ===========
See notes to unaudited pro forma financial information. 4 5 Omnicare, Inc. and Subsidiary Companies Pro Forma Consolidated Statement of Income Unaudited For The Six Months Ended June 30, 1997
(In thousands, except per share data) Historical ---------------------- American Pro Forma Pro Forma Omnicare Medserve Adjustments Adjusted -------- -------- ----------- ---------- Sales $ 384,668 $ 75,563 $ -- $ 460,231 Cost of sales 273,037 54,484 737(k) 328,258 --------- -------- ------- --------- Gross profit 111,631 21,079 (737) 131,973 Selling, general and administrative expenses 64,764 17,413 2,733 (g) 83,061 (914)(h) (198)(j) (737)(k) Acquisition expenses, pooling-of-interests 1,671 -- -- 1,671 --------- -------- ------- --------- Operating income 45,196 3,666 (1,621) 47,241 Investment income 3,055 -- -- 3,055 Interest expense (483) (389) (7,029)(i) (7,901) Other, net -- 239 -- 239 --------- -------- ------- --------- Income before income taxes 47,768 3,516 (8,650) 42,634 Income taxes 19,187 1,499 (2,403)(l) 18,283 --------- -------- ------- --------- Net income $ 28,581 $ 2,017 $(6,247) $ 24,351 ========= ======== ======= ========= Earnings per share: Primary $ .36 $ .31 ========= ========= Fully diluted $ .36 $ .31 ========= ========= Weighted average number of common shares outstanding: Primary 79,239 79,239 ========= ======= Fully diluted 79,335 79,335 ========= =======
See notes to unaudited pro forma financial information. 5 6 Omnicare, Inc. and Subsidiary Companies Pro Forma Consolidated Statement of Income Unaudited For The Year Ended December 31, 1996
(In thousands, except per share data) Historical ---------------------- American Pro Forma Pro Forma Omnicare Medserve Adjustments Adjusted -------- -------- ----------- -------- Sales $ 536,604 $ 82,027 $ -- $ 618,631 Cost of sales 381,768 58,807 716 (k) 441,291 --------- -------- --------- ---------- Gross profit 154,836 23,220 (716) 177,340 Selling, general and administrative expenses 89,636 19,605 5,467 (g) 112,770 (987)(h) (235)(j) (716)(k) Acquisition expenses, pooling-of-interests 690 -- -- 690 Nonrecurring charge -- 3,019(m) -- 3,019 --------- -------- --------- ---------- Operating income 64,510 596 (4,245) 60,861 Investment income 11,285 -- -- 11,285 Interest expense (3,652) (2,741) (12,258)(i) (18,651) Other, net -- 173 -- 173 --------- -------- --------- ---------- Income (loss) before extraordinary item and income taxes 72,143 (1,972) (16,503) 53,668 Income taxes 28,693 162 (4,454)(l) 24,401 --------- -------- --------- ---------- Income (loss) before extraordinary item $ 43,450 $ (2,134) $ (12,049) $ 29,267 ========= ======== ========= ========== Earnings per share before extraordinary item: Primary $ .64 $ .43 ========= ========== Fully diluted $ .61 $ .42 ========= ========== Weighted average number of common shares outstanding: Primary 67,388 67,388 ========= ========== Fully diluted 75,429 75,429 ========= ==========
See notes to unaudited pro forma financial information. 6 7 Notes to Unaudited Pro Forma Financial Information (dollars in thousands) Balance Sheet - ------------- (a) On September 16, 1997, Omnicare, Inc. (the "Company") completed the acquisition of all outstanding shares of American Medserve Corporation ("AMC") for a cash purchase price of approximately $223,000. The acquisition was accounted for under the purchase method of accounting and the total consideration to be paid, including estimated transaction costs of $10,000, was allocated to the tangible and identifiable intangible assets and liabilities acquired based on their estimated fair values at the date of acquisition. The excess of the acquisition 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 June 30, 1997. (b) On the closing date, the Company drew down $250,000 from its $400,000 revolving credit agreement to fund the cash purchase price for the AMC stock, the related estimated transaction costs and the repayment of approximately $16,700 of AMC's debt on the closing date. As of June 30, 1997, such debt totalled $16,520 and for purposes of the pro forma balance sheet, that amount is assumed to have been repaid as of June 30, 1997. Accordingly, the total cash paid as of June 30, 1997 is assumed to have been $249,520, which results in $480 of additional cash balances as of June 30, 1997. (c) To eliminate the AMC deferred debt issuance costs as of June 30, 1997 relating to the debt repaid by the Company at closing. (d) To eliminate AMC's existing goodwill as of June 30, 1997. (e) To record the estimated AMC employees' severance cost liability accrued in accordance with EITF 95-3 ($5,500) and the estimated transaction costs incurred by AMC that became payable on the closing date ($2,700). (f) To eliminate the stockholders' equity accounts of AMC. Income Statement - ---------------- (g) To reflect amortization of the goodwill of $218,677 recorded in connection with the purchase of AMC on a straight-line basis over 40 years. (h) To eliminate AMC's historical goodwill amortization. 7 8 (i) To adjust interest expense to
1996 1997 12 Months 6 Months --------- -------- (i) eliminate historical interest expense on the AMC debt repaid at closing $ (2,586) $ (393) (ii) record interest expense at 5.9375% (the current actual rate on the borrowing) on the $250 million of debt drawn down by the Company at closing (annual interest expense would change by approximately $313 for each 1/8% change in the interest rate). 14,844 7,422 -------- --------- $ 12,258 $ 7,029 ======== =========
(j) To eliminate AMC's historical amortization of debt issuance costs, included in selling, general and administrative expenses. (k) To reclassify certain general and administrative expenses of AMC to cost of sales in order to reflect cost of sales consistently with the Company. (l) Tax effect of pro forma adjustments, excluding the portion of goodwill amortization that is not tax deductible, at the Company's effective tax rate of approximately 40% which is not materially different than the combined federal and state statutory rates. (m) Represents (1) a noncash, nonrecurring charge of $2,500 (with no tax benefit) related to the sale of 310,208 shares of common stock of AMC to certain directors and officers at a price less than the initial public offering price of the common stock on November 13, 1996, and the conversion of options to purchase shares of common stock of certain subsidiaries into options to purchase 146,635 shares of common stock of AMC at a weighted average exercise price less than the initial public offering price of the common stock on November 13, 1996, (2) a charge of $300 ($200 net of tax) related to the termination of a professional services agreement with an affiliate of AMC's principal stockholder and (3) a charge of $200 ($100 net of tax) related to special bonuses paid to management in connection with AMC's initial public offering. 8 9 SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Omnicare, Inc. (Registrant) Date: December 4, 1997 By: /s/ David W. Froesel, Jr. ------------------------- ------------------------------------- David W. Froesel, Jr. Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 9 -----END PRIVACY-ENHANCED MESSAGE-----