-----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, WwukbqV4u0qXhXYDaVyVg7ZfcgrV/AZbs3eh5A1EZy78VX8Vv0NWF3gHfHXFp532 r7MuV6K4AZxbAXu5Kgc4Dw== 0000946489-98-000003.txt : 19980417 0000946489-98-000003.hdr.sgml : 19980417 ACCESSION NUMBER: 0000946489-98-000003 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980304 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980416 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHERIDAN HEALTHCARE INC CENTRAL INDEX KEY: 0000946489 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SPECIALTY OUTPATIENT FACILITIES, NEC [8093] IRS NUMBER: 043252967 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-26260 FILM NUMBER: 98595251 BUSINESS ADDRESS: STREET 1: 4651 SHERIDAN ST STREET 2: STE 400 CITY: HOLLYWOOD STATE: FL ZIP: 33021 BUSINESS PHONE: 3059875822 MAIL ADDRESS: STREET 1: 4651 SHERIDAN STREET STREET 2: SUITE 400 CITY: HOLLYWOOD STATE: FL ZIP: 33021 8-K/A 1 8-K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A Amendment No. 1 to Current Report on Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 March 4, 1998 (Date of Earliest Event reported) SHERIDAN HEALTHCARE, INC. (Exact name of registrant as specified in charter) Delaware 0-26806 04-3252967 (State or other (Commission File Number) (IRS Employer ID Number) jurisdiction of incorporation 4651 Sheridan Street Suite 400 Hollywood, Florida 33021 (Address of principal executive office, including zip code) 954/987-5822 (Registrant's telephone number, including area code) There are 17 pages in this Report. There are no exhibits to this Report.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (a) Financial Statements of Businesses Acquired: Page Michael Cavenee, M.D., P.A., and Kenneth Trimmer, M.D., P.A. Report of Independent Certified Public Accountants........................ 3 Combined Balance Sheet as of December 31, 1997............................ 4 Combined Statement of Operations for the Year Ended December 31, 1997..................................................... 5 Combined Statement of Stockholders' Equity for the Year Ended December 31, 1997.................................. 6 Combined Statement of Cash Flows for the Year Ended December 31, 1997..................................................... 7 Notes to Combined Financial Statements.................................... 8-11 (b) Pro Forma Financial Information: Introduction to Unaudited Pro Forma Consolidated Financial Statements..... 12 Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 1997............................................... 13 Notes to Unaudited Pro Forma Consolidated Balance Sheet................... 14 Unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 1997.......................................... 15 Notes to Unaudited Pro Forma Consolidated Statement of Operations......... 16
2 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Stockholders of Michael Cavenee, M.D., P.A. and Kenneth Trimmer, M.D., P.A.: We have audited the accompanying combined balance sheet of Michael Cavenee, M.D., P.A. (a Texas professional corporation) and Kenneth Trimmer, M.D., P.A. (a Texas professional corporation) as of December 31, 1997, and the related combined statements of operations, stockholders' equity and cash flows for the year then ended. These financial statements are the responsibility of the Companies' management. Our responsibility is to express an opinion on these financial 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 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 audit provides 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 Michael Cavenee, M.D., P.A. and Kenneth Trimmer, M.D., P.A. as of December 31, 1997, and the results of their operations and their cash flows for the year then ended in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Miami, Florida, March 25, 1998. 3
MICHAEL CAVENEE, M.D., P.A. AND KENNETH TRIMMER, M.D., P.A. COMBINED BALANCE SHEET DECEMBER 31, 1997 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 74,396 Accounts receivable, net of allowance for uncollectible accounts of $92,954 522,403 Other receivables 3,773 Other current assets 11,500 ------------- Total current assets 612,072 PROPERTY AND EQUIPMENT, net 70,693 ------------- Total assets $ 682,765 ============= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 234,743 Accrued liabilities 109,575 Current portion of long-term debt 27,398 ------------- Total current liabilities 371,716 ------------- LONG-TERM DEBT, net of current portion 27,416 ------------- COMMITMENTS AND CONTINGENCIES (Note 5) STOCKHOLDERS' EQUITY: Common stock, MC-M.D., $0.10 par value; 100,000 shares authorized; 1,000 shares issued and outstanding 100 Common stock, KT-M.D., $0.10 par value; 100,000 shares authorized; 1,000 shares issued and outstanding 100 Additional paid-in capital 1,800 Retained earnings 281,633 ------------- Total stockholders' equity 283,633 ------------- Total liabilities and stockholders' equity $ 682,765 =============
The accompanying notes to combined financial statements are an integral part of this combined balance sheet. 4
MICHAEL CAVENEE, M.D., P.A. AND KENNETH TRIMMER, M.D., P.A. COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 NET PATIENT SERVICE REVENUE $ 4,345,533 ------------- OPERATING COSTS AND EXPENSES: Salaries and benefits 2,001,029 Laboratory, drugs and medical supplies 295,806 General and administrative 482,645 Provision for bad debts 9,736 Depreciation 69,949 Amortization 5,297 ------------- Total operating costs and expenses 2,864,462 ------------- Operating income 1,481,071 OTHER INCOME (EXPENSE) (8,194) ------------- Income before pro forma tax provision 1,472,877 PRO FORMA TAX PROVISION (Note 3) 574,422 ------------- Pro forma net income $ 898,455 =============
The accompanying notes to combined financial statements are an integral part of this combined statement. 5
MICHAEL CAVENEE, M.D., P.A. AND ------------------------------- KENNETH TRIMMER, M.D., P.A. --------------------------- COMBINED STATEMENT OF STOCKHOLDERS' EQUITY ------------------------------------------ FOR THE YEAR ENDED DECEMBER 31, 1997 ------------------------------------ MC-M.D. KT-M.D. Additional Common Stock Common Stock Paid-In Retained -------------------------- ------------------------- Shares Amount Shares Amount Capital Earnings Total ------------ ------------ ------------ ------------ ------------ -------------- ------------ BALANCE, December 31, 1996 1,000 $ 100 1,000 $ 100 $ 1,800 $ 322,725 $ 324,725 Distributions to Stockholders - - - - - (1,513,969) (1,513,969) Income before pro forma tax provision - - - - - 1,472,877 1,472,877 ------------ ----------- ------------ ------------ ------------ ------------ ----------- BALANCE, December 31, 1997 1,000 $ 100 1,000 $ 100 $ 1,800 $ 281,633 $ 283,633 ============ =========== ============ ============ ============ ============= ===========
The accompanying notes to combined financial statements are an integral part of this combined statement. 6
MICHAEL CAVENEE, M.D., P.A. AND ------------------------------- KENNETH TRIMMER, M.D., P.A. --------------------------- COMBINED STATEMENT OF CASH FLOWS -------------------------------- FOR THE YEAR ENDED DECEMBER 31, 1997 ------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES: Income before pro forma tax provision $ 1,472,877 Adjustments to reconcile net income before pro forma tax provision to net cash provided by operating activities- Depreciation 69,949 Amortization 5,297 Provision for bad debts 9,736 Changes in assets and liabilities: Accounts receivable and other (67,600) Other current assets 3,941 Accounts payable 54,204 Accrued liabilities (18,059) ------------- Net cash provided by operating activities 1,530,345 ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (27,318) ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Payments on long-term debt (97,964) Proceeds from long-term debt 2,659 Distributions to stockholders (1,513,969) ------------- Net cash used in financing activities (1,609,274) ------------- Net decrease in cash and cash equivalents (106,247) CASH AND CASH EQUIVALENTS, beginning of year 180,643 ------------- CASH AND CASH EQUIVALENTS, end of year $ 74,396 ============= SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION: Interest paid $ 7,817 ============= Capital expenditures financed with long-term debt $ 22,950 =============
The accompanying notes to combined financial statements are an integral part of this combined statement. 7 MICHAEL CAVENEE, M.D., P.A. AND ------------------------------- KENNETH TRIMMER, M.D., P.A. --------------------------- NOTES TO COMBINED FINANCIAL STATEMENTS -------------------------------------- DECEMBER 31, 1997 ----------------- 1. SIGNIFICANT ACCOUNTING POLICIES: -------------------------------- a. Operations- ----------- Michael Cavenee, M.D., P.A. ("MC-M.D.", a Texas professional corporation) and Kenneth Trimmer, M.D., P.A. ("KT-M.D.", a Texas professional corporation) (collectively the "Companies") provide diagnostic, laboratory and surgical procedures, consultations, medical management and delivery services to women with high risk and/or complicated pregnancies, usually on a referral basis. The Companies operate two main offices in the greater Dallas, Texas area. b. Principles of Consolidation- ---------------------------- The accompanying combined financial statements include the financial statements of the Companies and their collectively wholly-owned subsidiary, North Texas Perinatal Associates, a Texas general partnership. All significant intercompany amounts and transactions have been eliminated. c. Cash and Cash Equivalents- -------------------------- The Companies consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Included in the cash and cash equivalents balance at December 31, 1997, are interest-bearing accounts of $4,844. d. Accounts Receivable and Revenues- --------------------------------- The Companies derive substantially all of their revenues from various third-party payors including the Medicaid program, health maintenance organizations, commercial insurers and others. The amount of the payments received from such third-party payors is dependent upon mandated payment rates in the case of the Medicaid program, and negotiated payment rates in the case of other third-party payors, as well as the specific benefits included in each patient's applicable health care coverage. The Companies record their revenues net of an allowance for contractual adjustments which represents the difference between billed charges and expected collections from third-party payors. Accordingly, net revenue and accounts receivable are reflected in the combined financial statements net of contractual allowances. 8 e. Property and Equipment- ----------------------- Property and equipment are stated at cost less accumulated depreciation. Property and equipment are depreciated using straight-line and accelerated methods over the estimated useful lives of the assets. Maintenance and repairs are charged to expense when incurred and improvements are capitalized. Upon the sale or retirement of assets, the cost and accumulated depreciation are removed from the balance sheet and any gain or loss is recognized currently. f. 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. g. Fair Value of Financial Instruments- ------------------------------------ Statement of Financial Accounting Standards No. 107, "Disclosures About Fair Value of Financial Instruments," requires disclosure of the fair value of certain financial instruments. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and debt, are reflected in the accompanying combined financial statements at cost which approximates fair value. 2. PROPERTY AND EQUIPMENT: ----------------------- Property and equipment consists of the following at December 31, 1997: Useful Lives Amount ---------------- --------- Medical equipment 5 - 7 years $ 359,674 Furniture and fixtures 5 - 7 years 141,295 Leasehold improvements Life of lease 108,386 --------- 609,355 Less- accumulated depreciation (538,662) --------- $ 70,693 ========= 3. INCOME TAXES: ------------- MC-M.D. and KT-M.D. are S Corporation's. Accordingly, the results of their operations flow through to the stockholders' individual tax returns. The pro forma tax provision reflects income taxes at an overall effective rate of 39% as if the Companies had been C Corporations. 9 4. LONG-TERM DEBT: --------------- Long-term debt consists of the following at December 31, 1997:
Amount --------------- Unsecured note payable to Columbia Medical Center of Plano Bearing interest at 8.00%; monthly principal and interest payments of $508 due through May 3, 2002 $ 22,950 Unsecured note payable to Presbyterian Hospital of Dallas bearing interest at 8.50%; monthly principal and interest payments of $2,055 due through April 1, 1999 31,864 ------------ 54,814 Less - current portion (27,398) ------------ $ 27,416 ============
Following is a summary of annual maturities of long-term debt: Year Amount ---- ------------ 1998 $ 27,398 1999 13,948 2000 5,286 2001 5,688 2002 2,494 ------------ $ 54,814 ============ 5. COMMITMENTS AND CONTINGENCIES: ------------------------------ a. Insurance- ---------- Each physician employed by the Companies maintains insurance coverage under a claims-made policy for their professional malpractice claims. Such insurance provides for coverage to the extent individual claims do not exceed $1,000,000 per incident and $3,000,000 in the aggregate per year. The Companies have recorded an estimated liability related to claims incurred but not reported for approximately $51,400 as of December 31, 1997, which is included as a component of accrued liabilities in the accompanying combined balance sheet. Due to the nature of their business, the Companies may from time to time become involved as a defendant in medical malpractice lawsuits and are subject to the attendant risk of substantial damage awards. The Companies maintain insurance in amounts deemed appropriate by management, based upon the nature and risks of their business. There can be no assurance, however, that a future claim or claims will not exceed the limits of available insurance coverage, that any insurer will remain solvent and able to meet its obligations to provide coverage for any such claim or claims or that such coverage will continue to be available with sufficient limits and at a reasonable cost to adequately and economically insure the Companies' operations in the future. A judgment against the Companies in excess of such coverage could have a material adverse effect on the Companies. 10 b. Lease Commitments- ------------------ The Companies lease medical office facilities and certain office equipment under various operating leases. Rental expense under operating leases was approximately $128,000 for the year ended December 31, 1997 and is included in general and administrative expense in the accompanying combined statement of operations. Future annual minimum payments under operating leases are as follows: Year Amount ---- ------------ 1998 $ 123,471 1999 94,893 2000 68,248 2001 26,400 ------------ $ 313,012 ============ c. Government Regulation- ---------------------- The healthcare industry is highly regulated and there can be no assurance that the regulatory environment in which the Companies operate will not change significantly and adversely in the future. In general, regulation of healthcare providers and companies is increasing. Federal and state laws regulate the healthcare industry, the relationship between practice management companies, and the relationship among physicians and other providers of healthcare services. Several laws, including fee-splitting, anti-kickback laws and prohibition of the corporate practice of medicine, have civil and criminal penalties and have been subject to limited judicial and regulatory interpretation. They are enforced by regulatory agencies vested with broad discretion interpreting them. The Companies agreements and business activities have not been examined by federal and state authorities under these laws and regulations. Although the Companies believe that their operations are conducted so as to comply with all of the applicable laws, there can be no assurance such operations will not be challenged as in violation of one or more of such laws. There have been numerous initiatives at the federal and state levels for comprehensive reforms affecting the availability of, and payment for, healthcare. The Companies believe that such initiatives will continue during the foreseeable future. Certain reforms previously proposed could, if adopted, have a material effect on the Companies. d. Subsequent Sale of the Companies- --------------------------------- On March 4, 1998, an agreement was entered into between Sheridan Healthcare, Inc. ("Sheridan") and the Companies whereby Sheridan purchased options to acquire the Companies. Concurrent with the acquisition of the options, Sheridan entered into long-term management agreements with the Companies. 11 INTRODUCTION TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS GENERAL The following unaudited pro forma consolidated balance sheet as of December 31, 1997 and the unaudited pro forma consolidated statement of operations for the year ended December 31, 1997 reflect adjustments to the Company's historical financial position and results of operations to give effect to the transactions discussed below as if such transactions had been consummated at December 31, 1997, in the case of the balance sheet, and at January 1, 1997, in the case of the statement of operations. The accompanying unaudited pro forma consolidated financial statements should be read in connection with the consolidated financial statements of the Company included in the Company's Annual Report on Form 10-K for the year ended December 31, 1997. The unaudited pro forma consolidated financial statements have been prepared by the Company based, in part, on the audited financial statements of the businesses acquired as required under the Securities Exchange Act of 1934, which financial statements are included in this Form 8-K/A. These unaudited pro forma consolidated financial statements are not intended to be indicative of the results that would have occurred if the transactions had occurred on the dates indicated or which may be realized in the future. ACQUISITIONS COMPLETED IN 1998 On March 5, 1998, Sheridan Healthcorp, Inc., a wholly-owned subsidiary of the Company, entered into a long-term management services agreement with Michael Cavenee, M.D., P.A. ("Cavenee") and Kenneth Trimmer, M.D., P.A. ("Trimmer", and together with "Cavenee", "Perinatology"). In addition, the Company acquired options to purchase at any time the stock of Cavenee and Trimmer at a specified exercise price. The aggregate consideration paid for the options was approximately $4.0 million in cash and 885,000 shares of the Company's common stock. As a result of these transactions, which have been accounted for as purchases, goodwill of approximately $16.9 million was recorded. This goodwill is being amortized over 25 years. The terms of the long-term management services agreements between the Company and Perinatology meet the requirement of EITF Issue 97-2, "Application of Physician Entities", for demonstrating a controlling financial interest by the Company. Accordingly, the operations of perinatology should be consolidated with the operations of the Company. The unaudited pro forma consolidated statement of operations for the year ended December 31, 1997 includes the operating results of Perinatology for the year ended December 31, 1997. 12
SHERIDAN HEALTHCARE, INC. UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET December 31, 1997 (in thousands) Acquisition Actual Perinatology Adjustments Pro Forma ----------- ----------- ----------- ----------- ASSETS Current assets: Cash and cash equivalents.................................. $ 427 $ 74 $ --- $ 501 Accounts receivable, net................................... 21,588 522 --- 22,110 Income tax refund receivables.............................. 1,280 --- --- 1,280 Deferred income taxes...................................... 1,417 --- --- 1,417 Other current assets....................................... 2,814 16 --- 2,830 ----------- ----------- ----------- ----------- Total current assets..................................... 27,526 612 --- 28,138 Property and equipment, net................................... 3,538 71 --- 3,609 Goodwill, net................................................. 54,168 --- 16,855 (1) 71,023 Intangible assets, net........................................ 1,803 --- 2 (1) 1,805 ----------- ----------- ----------- ----------- Total assets............................................. 87,035 683 16,857 104,575 =========== =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable........................................... 591 235 --- 826 Amounts due for acquisitions............................... 527 --- --- 527 Accrued salaries and benefits.............................. 2,686 --- --- 2,686 Self-insurance accruals.................................... 3,973 51 --- 4,024 Refunds payable............................................ 2,674 --- --- 2,674 Accrued lease obligations.................................. 338 --- --- 338 Accrued physician incentives............................... 744 --- --- 744 Other accrued expenses..................................... 1,897 59 --- 1,956 Current portion of long-term debt.......................... 446 27 --- 473 ----------- ----------- ----------- ----------- Total current liabilities................................ 13,876 372 --- 14,248 Long-term debt, net of current portion........................ 29,833 27 3,977 (2) 33,837 Amounts due for acquisitions.................................. 1,976 --- --- 1,976 Stockholder's equity: Preferred stock............................................ --- --- --- --- Common stock: Voting.................................................. 66 --- 1 67 Class A non-voting...................................... 3 --- --- 3 Additional paid-in capital................................. 61,352 2 13,163 (3) 74,515 (2)(4) Excess purchase price distributed to management stockholders.............................. (7,541) --- --- (7,541) Accumulated deficit........................................ (12,530) 282 (282)(4) (12,530) ----------- ------------ ----------- ---------- Total stockholders' equity.............................. 41,350 284 12,880 54,514 ----------- ------------ ----------- ----------- Total liabilities and stockholder's equity.............. $ 87,035 $ 683 $ 16,857 $ 104,575 =========== ============ =========== ===========
See accompanying notes. 13 SHERIDAN HEALTHCARE, INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET DECEMBER 31, 1997 The acquisition adjustments reflected on the unaudited pro forma consolidated balance sheet are as follows: (1) Represents the goodwill and intangible assets that would have been recorded if the acquisition of Perinatology completed in 1998 had occurred on December 31, 1997 as follows, (in thousands):
Aggregate purchase price............................................................ $ 17,141 Net assets acquired: Working capital.................................................................. 267 Property and equipment........................................................... 71 Intangible assets................................................................ 2 Long-term debt................................................................... (54) ----------- Net assets acquired............................................................ 286 ----------- Goodwill related to the acquisitions............................................. $ 16,855 ===========
(2) Represents the long-term debt incurred to finance the cash portion of the purchase price of the acquisition of Perinatology completed in 1998. (3) Represents the market value, as of March 4, 1998, of approximately 885,000 shares of the Company's common stock issued in connection with the acquisition of Perinatology. (4) Represents the elimination of the equity accounts of Perinatology. 14 SHERIDAN HEALTHCARE, INC. UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (IN THOUSANDS, EXCEPT PER SHARE DATA)
Acquisition Actual Perinatology Adjustments Pro Forma ----------- ----------- ----------- ----------- Net revenue................................................... $ 98,616 $ 4,346 $ --- $ 102,962 Operating expenses: Direct facility expenses................................... 68,919 2,780 (1,061)(1) 70,638 Provision for bad debts.................................... 4,066 10 --- 4,076 Salaries and benefits...................................... 7,424 --- --- 7,424 General and administrative................................. 4,900 --- --- 4,900 Amortization............................................... 2,096 5 675(2) 2,776 Depreciation............................................... 689 70 --- 759 ----------- ----------- ----------- ----------- Total operating expenses................................. 88,094 2,865 (386) 90,573 ----------- ----------- ----------- ----------- Operating income.............................................. 10,522 1,481 386 12,389 Interest expense, net......................................... 2,461 8 308(3) 2,777 ----------- ----------- ----------- ---------- Income before income taxes.................................... 8,061 1,473 78 9,612 Income tax expense (benefit).................................. 2,894 574 31(4) 3,499 ----------- ----------- ----------- ---------- Net income (loss)............................................. $ 5,167 $ 899 $ 47 $ 6,113 =========== =========== =========== ========== Net income (loss) per share Basic.................................................... $ 0.77 $ 0.80 Diluted.................................................. $ 0.73 $ 0.77 Weighted average share of common stock and common stock equivalents outstanding Basic................................................... 6,722 --- 885(5) 7,607 Diluted................................................. 7,035 --- 885(5) 7,920
See accompanying notes. 15 SHERIDAN HEALTHCARE, INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS Year Ended December 31, 1997 The acquisition adjustments reflected on the unaudited pro forma consolidated statement of operations are as follows: (1) Represents the difference between the contracted physician compensation rates that are effective post-acquisition and actual physician compensation expense recorded by Perinatology. (2) Represents amortization of the goodwill and intangibles resulting from the acquisition of Perinatology as follows, (in thousands):
Asset Amortizeable Annual Amount Life Amortization -------------- ------------ ------------ Goodwill........................................... $ 16,855 25 years $ 674 Intangible assets.................................. $ 2 5 years $ 1 -------------- Total amortization.............................. $ 675 ==============
(3) Represents interest expense on the funds borrowed for the acquisition of Perinatology. (4) Represents income tax expense on the net earnings of Perinatology as adjusted for items in Notes (1) through (3). (5) Represents shares of the Company's common stock issued in connection with the acquisition of Perinatology. 16 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. Sheridan Healthcare, Inc. (Registrant) Date: April 16,1998 By: /s/Mitchell Eisenberg -------------------------------------- Mitchell Eisenberg, M.D. President and Chief Executive Officer 17 -----END PRIVACY-ENHANCED MESSAGE-----