-----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, B3eQDIsDLcAP17PSIV0mSoRPlWpfXbXHv7NisskOMFXQ6LQtfa95f62uRmlN6edx nMfvak3WQNYHv75I3jTI6Q== 0000950144-98-013222.txt : 19981123 0000950144-98-013222.hdr.sgml : 19981123 ACCESSION NUMBER: 0000950144-98-013222 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981120 ITEM INFORMATION: FILED AS OF DATE: 19981120 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENVOY CORP /TN/ CENTRAL INDEX KEY: 0000932277 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 621575729 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-25062 FILM NUMBER: 98755920 BUSINESS ADDRESS: STREET 1: 15 CENTURY BLVD SUITE 600 CITY: NASHVILLE STATE: TN ZIP: 37214 BUSINESS PHONE: 6152314891 MAIL ADDRESS: STREET 1: 15 CENTURY BLVD SUITE 600 CITY: NASHVILLE STATE: TN ZIP: 37214 FORMER COMPANY: FORMER CONFORMED NAME: NEW ENVOY INC DATE OF NAME CHANGE: 19941102 8-K/A 1 ENVOY CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A 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): November 20, 1998 (August 7, 1997) ENVOY CORPORATION (Exact name of registrant as specified in its charter) Tennessee 0-25062 62-1575729 (State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.)
Two Lakeview Place 15 Century Boulevard, Suite 600, Nashville, TN 37214 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (615) 885-3700 Not Applicable (Former name or former address, if changed since last report) 2 This Current Report on Form 8-K/A No. 2 is being filed solely to include historical interim financial statements of HDIC as of June 30, 1997 and 1996 and, therefore, amends and supersedes, to the extent set forth herein, "Item 7. Financial Statements, Pro Forma Financial Information and Exhibits" of the Registrant's Current Report on Form 8-K, as filed on August 7, 1997 and amended on October 20, 1997. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (a) Financial Statements of Business Acquired The following financial statements of HDIC are contained on pages 3 to 9 of this report: Report of Independent Auditors Combined Balance Sheets as of December 31, 1996 and 1995 and June 30, 1997 (Unaudited) Combined Statements of Operations for the years ended December 31, 1996, 1995 and 1994 and for the six months ended June 30, 1997 and 1996 (Unaudited) Combined Statements of Shareholders' Deficit for the years ended December 31, 1996, 1995, and 1994 and for the six months ended June 30, 1997 (Unaudited) Combined Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994 and for the six months ended June 30, 1997 and 1996 (Unaudited) Notes to Combined Financial Statements (b) Pro Forma Financial Information (unaudited): Introduction to Unaudited Pro Forma Condensed Combined Financial Information* Pro Forma Condensed Combined Balance Sheet as of June 30, 1997* Pro Forma Condensed Combined Statement of Operations for the six months ended June 30, 1997* Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 1996* Notes to Unaudited Pro Forma Condensed Combined Financial Information* - -------- * Previously filed 2 3 REPORT OF INDEPENDENT AUDITORS Board of Directors and Shareholder of Healthcare Data Interchange Corporation We have audited the accompanying combined balance sheets of Healthcare Data Interchange Corporation and Aetna Data Interchange (the electronic interchange business of Aetna Inc.) as of December 31, 1996 and 1995, as described in Note 1, and the related combined statements of operations, shareholder's deficit, and cash flows for the three years in the period ended December 31, 1996. These financial statements are the responsibility of management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the combined financial position of Healthcare Data Interchange Corporation and Aetna Data Interchange at December 31, 1996 and 1995 and the combined results of their operations and their cash flows for the three years in the period ended December 31, 1996 in conformity with generally accepted accounting principles. /s/ ERNST & YOUNG LLP July 31, 1997 Philadelphia, Pennsylvania 3 4 HEALTHCARE DATA INTERCHANGE CORPORATION COMBINED BALANCE SHEETS
DECEMBER 31, JUNE 30, --------------------------- ------------ 1996 1995 1997 ------------ ------------ ------------ (UNAUDITED) ASSETS Current assets: Cash............................................. $ 11,492 $ 12,125 $ 11,930 Short-term investments........................... -- 535,250 -- Other............................................ 75,000 7,412 75,000 ------------ ------------ ------------ Total current assets..................... 86,492 554,787 86,930 Equipment.......................................... 169,000 94,000 176,000 Less accumulated depreciation...................... 66,498 22,666 94,387 ------------ ------------ ------------ 102,502 71,334 81,613 Other.............................................. -- 201,457 -- ------------ ------------ ------------ Total assets............................. $ 188,994 $ 827,578 $ 168,543 ============ ============ ============ LIABILITIES AND SHAREHOLDER'S DEFICIT Current liabilities: Intercompany payable............................. $ 22,377,182 $ 10,898,840 $ 31,549,050 ------------ ------------ ------------ Total current liabilities................ 22,377,182 10,898,840 31,549,050 Shareholder's deficit: Common stock..................................... 3 3 3 Class B common stock............................. 1 1 1 Additional paid-in capital....................... 222,496 222,496 222,496 Retained deficit................................. (22,410,688) (10,293,762) (31,603,007) ------------ ------------ ------------ Total shareholder's deficit.............. (22,188,188) (10,071,262) (31,380,507) ------------ ------------ ------------ Total liabilities and shareholder's deficit................................ $ 188,994 $ 827,578 $ 168,543 ============ ============ ============
See accompanying notes. 4 5 HEALTHCARE DATA INTERCHANGE CORPORATION COMBINED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30, ---------------------------------------- ------------------------- 1996 1995 1994 1997 1996 ------------ ----------- ----------- ----------- ----------- (UNAUDITED) (UNAUDITED) Revenues (Note 1).............. $ -- $ -- $ -- $ -- $ -- Operating costs and expenses: Personnel costs.............. 4,835,681 5,837,557 2,753,751 1,614,401 2,494,627 Vendor fees.................. 11,818,465 1,768,866 381,719 11,459,961 5,250,600 Depreciation................. 43,832 18,832 3,834 27,889 15,666 General and administrative... 1,228,991 1,542,541 40,549 434,809 698,168 ------------ ----------- ----------- ----------- ----------- Operating loss................. (17,926,969) (9,167,796) (3,179,853) (13,537,060) (8,459,061) Other income (expense): Interest income.............. 14,546 23,299 43,261 438 12,752 Intercompany interest expense................... (630,000) (345,000) (135,000) (605,000) (310,000) Other........................ (99,503) 776 1,299 303 (3,103) ------------ ----------- ----------- ----------- ----------- (714,957) (320,925) (90,440) (604,259) (300,351) Loss before income taxes....... (18,641,926) (9,488,721) (3,270,293) (14,141,319) (8,759,412) Benefit for income taxes....... 6,525,000 3,321,000 1,145,000 4,949,000 3,066,000 ------------ ----------- ----------- ----------- ----------- Net loss....................... $(12,116,926) $(6,167,721) $(2,125,293) $(9,192,319) $(5,693,412) ============ =========== =========== =========== ===========
See accompanying notes. 5 6 HEALTHCARE DATA INTERCHANGE CORPORATION COMBINED STATEMENTS OF SHAREHOLDER'S DEFICIT
CLASS B COMMON STOCK COMMON STOCK ADDITIONAL TOTAL --------------- --------------- PAID-IN RETAINED SHAREHOLDER'S SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT DEFICIT ------ ------ ------ ------ ---------- ------------ ------------- Balance at December 31, 1993........... 300 $3 100 $1 $222,496 $ (2,000,748) $ (1,778,248) Net loss............................. -- -- -- -- -- (2,125,293) (2,125,293) --- -- --- -- -------- ------------ ------------ Balance at December 31, 1994........... 300 3 100 1 222,496 (4,126,041) (3,903,541) Net loss............................. -- -- -- -- -- (6,167,721) (6,167,721) --- -- --- -- -------- ------------ ------------ Balance at December 31, 1995........... 300 3 100 1 222,496 (10,293,762) (10,071,262) Net loss............................. -- -- -- -- -- (12,116,926) (12,116,926) --- -- --- -- -------- ------------ ------------ Balance at December 31, 1996........... 300 3 100 1 222,496 (22,410,688) (22,188,188) Net loss (unaudited)................. -- -- -- -- -- (9,192,319) (9,192,319) --- -- --- -- -------- ------------ ------------ Balance at June 30, 1997 (unaudited)... 300 $3 100 $1 $222,496 $(31,603,007) $(31,380,507) === == === == ======== ============ ============
See accompanying notes. 6 7 HEALTHCARE DATA INTERCHANGE CORPORATION COMBINED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30, ---------------------------------------- ------------------------- 1996 1995 1994 1997 1996 ------------ ----------- ----------- ----------- ----------- (UNAUDITED) (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES Net loss....................... $(12,116,926) $(6,167,721) $(2,125,293) $(9,192,319) $(5,693,412) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation.............. 43,832 18,832 3,834 27,889 15,666 Change in assets and liabilities: Increase in intercompany payable.............. 11,478,342 6,227,973 2,457,729 9,171,868 5,674,587 Other................... 133,869 (338) (2,705) -- 2,903 ------------ ----------- ----------- ----------- ----------- Net cash (used in) provided by operating activities......... (460,883) 78,746 333,565 7,438 (256) INVESTMENT ACTIVITIES Net decrease (increase) in short-term investments....... 535,250 (4,554) (314,132) -- (193) Purchase of equipment.......... (75,000) (75,000) (19,000) (7,000) -- ------------ ----------- ----------- ----------- ----------- Net cash provided by (used in) investing activities......... 460,250 (79,554) (333,132) (7,000) (193) ------------ ----------- ----------- ----------- ----------- Net (decrease) increase in cash......................... (633) (808) 433 438 (449) Cash at beginning of period.... 12,125 12,933 12,500 11,492 12,125 ============ =========== =========== =========== =========== Cash at end of period.......... $ 11,492 $ 12,125 $ 12,933 $ 11,930 $ 11,676 ============ =========== =========== =========== ===========
See accompanying notes. 7 8 HEALTHCARE DATA INTERCHANGE CORPORATION NOTES TO COMBINED FINANCIAL STATEMENTS 1. ORGANIZATION AND BASIS OF PRESENTATION These combined financial statements include the accounts of Healthcare Data Interchange Corporation ("HDIC") and Aetna Data Interchange ("ADI") as defined below. U.S. Healthcare, Inc. and Aetna Life and Casualty Company, Inc. merged as of July 19, 1996, forming Aetna Inc., a new parent company. HDIC was incorporated in 1992 as a wholly-owned subsidiary of U.S. Healthcare, Inc. During 1995 Aetna Life and Casualty Company, Inc. began an electronic data interchange division, Aetna Data Interchange (ADI). The principal activity of HDIC and ADI is to provide electronic data interchange services to their parent companies. The accompanying financial statements include the direct expenses of HDIC and ADI required to provide electronic data interchange services to U.S. Healthcare, Inc. and Aetna Life and Casualty Company, Inc., respectively. The operations of the combined business have been accounted for as a cost center; accordingly, the accompanying financials do not include any revenue for the electronic services provided. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UNAUDITED INTERIM FINANCIAL STATEMENTS The combined balance sheet as of June 30, 1997 and the related combined statements of operations, stockholders' deficit, and cash flows for the six months then ended (interim financial statements) have been prepared by the Company's management and are unaudited. In the opinion of management, the interim financial statements include all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the interim results. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted from the interim financial statements. The interim financial statements should be read in conjunction with the December 31, 1996 audited financial statements appearing herein. The results of the six months ended June 30, 1997 and 1996 may not be indicative of operating results for the full year. SHORT-TERM INVESTMENTS Short-term investments include investments in United States Treasury Securities and certificates of deposit. Carrying value of the investments approximated fair value. EQUIPMENT Equipment is recorded at cost. Depreciation is provided over the estimated lives of the respective assets on the straight-line basis principally over five years. USE OF ESTIMATES The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 3. INTERCOMPANY PAYABLE Intercompany payable amounts are owed to parent entities for amounts paid on behalf of the subsidiaries and expenses allocated to the subsidiaries for services rendered, principally salaries and overhead. Intercompany interest is computed based upon U.S. Healthcare, Inc.'s average overnight repo return. 8 9 HEALTHCARE DATA INTERCHANGE CORPORATION COMBINED NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 4. INCOME TAXES HDIC and ADI are included in the consolidated federal income tax return of their respective parents. Individual current federal income tax provisions are generally computed as if the subsidiaries were filing separate federal tax returns; current income tax benefits, including those resulting from carrybacks, are recognized to the extent realized in the consolidated return. Amounts so computed are included in intercompany payable. 5. SUBSEQUENT EVENT As of January 1, 1997, ADI was combined with U.S. Healthcare's HDIC subsidiary. On June 14, 1997, U.S. Healthcare entered into an agreement to sell HDIC to ENVOY Corporation for approximately $36.4 million. The agreement includes an exclusive contract for ENVOY Corporation to provide electronic data interchange services to Aetna Inc.'s health maintenance organizations for up to 10 years. 9 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to this report to be signed on its behalf by the undersigned hereunto duly authorized. ENVOY CORPORATION Date: November 20, 1998 By: /s/ Kevin M. McNamara ----------------------- Kevin M. McNamara Senior Vice President and Chief Financial Officer 10 -----END PRIVACY-ENHANCED MESSAGE-----