<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 8-K/A-1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: August 13, 1996
---------------
(Date of earliest event reported)
NCS HEALTHCARE, INC.
--------------------
(Exact name of Registrant as specified in its charter)
Delaware 0-027602 34-1816187
- ---------------------------- ----------- -----------------
(State or other jurisdiction (Commission (I.R.S. employer
of incorporation) file number) identification no.)
3201 Enterprise Parkway, Suite 220, Beachwood, Ohio 44122
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (216) 514-3350
--------------
<PAGE> 2
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K dated
August 13, 1996 as set forth in the pages attached hereto:
"Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits" is hereby amended and restated to include historical and pro forma
financial information required in connection with the acquisition of Thrifty
Medical Systems by the Registrant.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
- ----------------------------------------------------------------------------
(a) Financial Statements of Businesses Acquired.
--------------------------------------------
Thrifty Medical Systems Financial Statements
Report of Independent Auditors
Combined Balance Sheet at June 30, 1996
Combined Statement of Income for the year ended June 30, 1996
Combined Statement of Cash Flows for the year ended June 30, 1996
Notes to Combined Financial Statements
(b) Pro Forma Financial Information.
--------------------------------
Pro Forma Consolidated Balance Sheet
Pro Forma Consolidated Statement of Income
(c) Exhibits.
---------
<TABLE>
<CAPTION>
Sequential
Exhibit No. Description Page No.
- ----------- ----------- --------
<S> <C> <C>
2.1 Asset Purchase Agreement, dated August 13, 1996, by and among *
Thrifty Medical of Tulsa, L.L.C., an Oklahoma limited
liability company, Willis V. Smith, Charles Oliver
and NCS HealthCare of Oklahoma, Inc., an Oklahoma
corporation.
2.2 Agreement of Merger, dated August 13, 1996, by and among Northside *
Pharmacy, Inc., an Oklahoma corporation, Willis V. Smith, Charles
Oliver, the Willis Vernon Smith Unitrust Dated August 8, 1996, NCS
HealthCare of Oklahoma, Inc., an Oklahoma corporation, and the
Registrant.
2.3 Stock Purchase Agreement, dated August 13, 1996, by and among the *
Willis Vernon Smith Unitrust Dated August 8, 1996, Charles Oliver,
Willis V. Smith and the Registrant.
99.1 Employment Agreement, dated as of August 13, 1996, by and between *
NCS HealthCare of Oklahoma, Inc., an Oklahoma corporation, and
Willia V. Smith.
</TABLE>
2
<PAGE> 3
<TABLE>
<CAPTION> Sequential
Exhibit No. Description Page No.
- ----------- ----------- --------
<S> <C> <C>
99.2 Employment Agreement, dated as of August 13, 1996, by and between *
NCS HealthCare of Oklahoma, Inc., an Oklahoma corporation, and
Charles Oliver.
99.3 Employment Agreement, dated as of August 13, 1996, by and between *
NCS HealthCare of Oklahoma, Inc., an Oklahoma
corporation, and Gail Benjamin.
- ----------------------------
<FN>
* Previously filed.
</TABLE>
3
<PAGE> 4
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.
NCS HEALTHCARE, INC.
By: /s/Jeffrey R. Steinhilber
--------------------------
Jeffrey R. Steinhilber,
Senior Vice President and
Chief Financial Officer
Date: October 21, 1996
4
<PAGE> 5
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders of
NCS HealthCare, Inc.
We have audited the accompanying combined balance sheet of Thrifty Medical
Systems (Systems) as of June 30, 1996, and the related combined statements of
income and cash flows for the year then ended. These financial statements are
the responsibility of Systems' 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 Thrifty Medical
Systems at June 30, 1996, and the combined results of its operations and its
cash flows for the year then ended, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Cleveland, Ohio
August 26, 1996
<PAGE> 6
THRIFTY MEDICAL SYSTEMS
COMBINED BALANCE SHEET
JUNE 30, 1996
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS
Cash and cash equivalents.................................................... $ 1,560
Accounts receivable, less allowance for doubtful accounts of $327,300........ 2,529,786
Inventories, less obsolescence reserve of $125,000........................... 967,536
Deferred income taxes........................................................ 135,500
Other........................................................................ 5,753
----------
Total current assets........................................................... 3,640,135
PROPERTY AND EQUIPMENT
Fixtures and equipment....................................................... 1,275,222
Land, building and improvements.............................................. 363,545
Vehicles..................................................................... 440,684
----------
2,079,451
Less accumulated depreciation................................................ 916,449
----------
1,163,002
----------
TOTAL ASSETS................................................................... $4,803,137
==========
</TABLE>
See accompanying notes.
<PAGE> 7
THRIFTY MEDICAL SYSTEMS
COMBINED BALANCE SHEET
JUNE 30, 1996
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C>
CURRENT LIABILITIES
Accounts payable............................................................. $ 658,323
Accrued payroll.............................................................. 63,736
Income taxes payable......................................................... 356,100
Accrued expenses and other................................................... 36,004
Notes payable to principal shareholders...................................... 352,236
Current portion of long-term debt............................................ 1,567,935
----------
Total current liabilities............................................ 3,034,334
Long-term debt, excluding current portion...................................... 406,649
STOCKHOLDERS' EQUITY
Common stock, no par value; 500 shares authorized, issued and outstanding.... 500
Retained earnings............................................................ 1,361,654
----------
1,362,154
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..................................... $4,803,137
==========
</TABLE>
See accompanying notes.
<PAGE> 8
THRIFTY MEDICAL SYSTEMS
COMBINED STATEMENT OF INCOME
YEAR ENDED JUNE 30, 1996
<TABLE>
<S> <C>
Revenues...................................................................... $10,985,666
Cost of revenues.............................................................. 5,800,923
-----------
Gross profit.................................................................. 5,184,743
Selling, general and administrative expenses.................................. 4,475,562
-----------
Operating income.............................................................. 709,181
Interest expense.............................................................. 159,265
-----------
Income before income taxes.................................................... 549,916
Income tax expense............................................................ 220,600
-----------
Net income.................................................................... $ 329,316
===========
</TABLE>
See accompanying notes.
<PAGE> 9
THRIFTY MEDICAL SYSTEMS
COMBINED STATEMENT OF CASH FLOWS
YEAR ENDED JUNE 30, 1996
<TABLE>
<S> <C>
OPERATING ACTIVITIES
Net income.................................................................... $ 329,316
Depreciation................................................................ 278,256
Provision for doubtful accounts............................................. 356,793
Provision for inventory obsolescence reserve................................ 43,000
Deferred income taxes....................................................... (23,200)
Changes in operating assets and liabilities:
Accounts receivable...................................................... (868,867)
Inventories.............................................................. (344,099)
Other assets............................................................. 565
Accounts payable......................................................... 27,461
Accrued payroll and income taxes payable................................. 18,245
Income taxes payable..................................................... 243,800
Accrued expenses and other............................................... 34,243
-----------
Net cash provided by operating activities..................................... 95,513
INVESTING ACTIVITIES
Capital expenditures for property, plant and equipment........................ (358,562)
-----------
Net cash used in investing activities......................................... (358,562)
FINANCING ACTIVITIES
Proceeds from additional debt................................................. 651,030
Repayments of debt............................................................ (390,404)
-----------
Net cash provided by financing activities..................................... 260,626
-----------
Net decrease in cash and cash equivalents..................................... (2,423)
Cash and cash equivalents at beginning of year................................ 3,983
-----------
CASH AND CASH EQUIVALENTS AT END OF YEAR...................................... $ 1,560
===========
INTEREST PAID................................................................. $ 159,265
===========
TAXES PAID.................................................................... $ 0
===========
</TABLE>
See accompanying notes.
<PAGE> 10
THRIFTY MEDICAL SYSTEMS
NOTES TO COMBINED FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS
Thrifty Medical of Tulsa, LLC which is a limited liability company,
Northside Pharmacy, Inc., a C Corporation, and Thrifty Medical Supply, Inc., a C
Corporation are under common control and are combined as Thrifty Medical Systems
(Systems). All entities operate in one business segment providing a broad range
of health care services primarily to long-term care, assisted living facilities
and other institutional settings. These services include pharmacy, pharmacy
consulting, infusion therapy and home care services.
On August 13, 1996 NCS Healthcare, Inc. purchased substantially all of the
assets of Thrifty Medical Supply of Tulsa, LLC and all of the outstanding stock
of Northside Pharmacy, Inc. and Thrifty Supply, Inc.
REVENUE RECOGNITION
Revenue is recognized when products or services are provided to the
customer. A significant portion of Systems' revenues from sales of
pharmaceutical and medical products are reimbursable from third-party payors
(principally Medicaid and Medicare). Systems monitors its receivables from these
reimbursement sources under policies established by management and reports such
revenues at the net realizable amount expected to be received from these
third-party payors. In addition, an allowance for doubtful accounts is provided
for the estimated losses that will be incurred in the collection of outstanding
accounts receivable balances. Estimated losses are based on a review of the
current status of outstanding accounts receivable balances.
CASH EQUIVALENTS
Systems considers all investments in highly liquid instruments with
original maturities of three months or less at the date purchased to be cash
equivalents. Investments in cash equivalents are carried at cost which
approximates market value.
INVENTORIES
Inventories consist primarily of purchased pharmaceuticals and medical
supplies and are stated at the lower of cost or market, determined using
primarily the first-in, first-out (FIFO) method.
PROPERTY AND EQUIPMENT
Property and equipment are on the basis of cost. Depreciation (including
amortization of capital leased assets) on property and equipment is computed
using an accelerated method for all property and equipment over the estimated
useful lives of the assets or lease period, whichever is less.
INCOME TAXES
Systems follows Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes. This accounting standard requires that the
liability method be used in accounting for income taxes. Under this accounting
method, deferred income taxes are determined based on the differences between
the financial reporting basis and the tax basis of assets and liabilities and
are measured using the enacted tax rates and laws that apply in the periods in
which the deferred income tax asset or liability is expected to be realized or
settled.
<PAGE> 11
THRIFTY MEDICAL SYSTEMS
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS
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 liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results can differ from these estimates.
2. LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<S> <C>
Notes payable due in monthly installments through October,
1998 at interest rates ranging from 8.49% to 10.25%.................. $ 828,199
9.5% notes payable due in monthly installments through
January, 2000........................................................ 681,238
Credit facility up to $100,000 at 9.5% due July, 1996.................. 96,000
8.0% notes payable due in October, 1996................................ 22,442
Various capital lease agreements due in monthly installments
through October, 1996 at interest rates ranging from 9.25% to
10.25%............................................................... 331,354
Other.................................................................. 15,351
----------
Total long-term debt................................................... 1,974,584
Less: current portion.................................................. 1,567,935
----------
LONG-TERM PORTION...................................................... $ 406,649
==========
</TABLE>
The future maturities of long-term debt are as follows:
<TABLE>
<S> <C>
Fiscal Years Ending June 30:
1997............................................. $1,567,935
1998............................................. 247,220
1999............................................. 101,303
2000............................................. 58,126
----------
$1,974,584
==========
</TABLE>
3. INCOME TAX EXPENSE
Income tax expense for the year ended June 30, 1996 consists of:
<TABLE>
<CAPTION>
CURRENT DEFERRED TOTAL
-------- -------- --------
<S> <C> <C> <C>
Federal............................................. $204,800 $(18,600) $186,200
State............................................... 39,000 (4,600) 34,400
-------- -------- --------
$243,800 $(23,200) $220,600
======== ======== ========
</TABLE>
Systems' deferred income tax asset is due to the temporary effects of the
allowance for doubtful accounts and accrued expenses.
The differences between the statutory federal income tax rate of 34% and
the effective income tax rate of 40% is due primarily to state income taxes, net
of federal benefit.
<PAGE> 12
THRIFTY MEDICAL SYSTEMS
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
4. OPERATING LEASES
Systems is obligated under several operating leases primarily for real
estate and machinery. Future minimum lease payments under noncancelable
operating leases as of June 30, 1996 are as follows:
<TABLE>
<S> <C>
Year Ending June 30:
1997............................................. $ 66,683
1998............................................. 45,472
1999............................................. 26,202
2000............................................. 660
2001............................................. 660
--------
$139,677
========
</TABLE>
Rent expense for Systems was $198,123 for the year ended June 30, 1996.
5. RELATED PARTY TRANSACTIONS
Systems leases certain primary operating facilities from its principal
shareholder under a month-to-month operating lease agreement. Systems paid the
principal shareholder $59,300 of rent expense for the year ended June 30, 1996.
Systems has non-interest bearing demand notes payable to its principal
shareholders amounting to $352,236 at June 30, 1996.
6. 401(K) PLAN
Systems maintains a 401(k) plan covering all eligible employees which
allows for both employer and employee contributions. Systems' contributions to
the plan and related expense recorded approximated $6,000 for the year ended
June 30, 1996.
<PAGE> 13
PRO FORMA CONSOLIDATED FINANCIAL DATA
The following unaudited Pro Forma Consolidated Balance Sheet
as of June 30, 1996 and Consolidated Statement of Income for the year ended June
30, 1996 are based on the historical consolidated financial statements of the
Company. The Consolidated Balance Sheet is adjusted to give effect to
acquisitions completed subsequent to June 30, 1996 and prior to August 28, 1996,
and to the sale of 3,650,000 shares of Class A Common Stock by the Company
pursuant to a registered public offering in September 1996 and the application
of the estimated net proceeds therefrom as if these events had occurred on June
30, 1996, but does not give effect to borrowings of approximately $3.1 million
occurred subsequent to August 28, 1996. The Pro Forma Consolidated Statement of
Income is adjusted to give effect to the completion of acquisitions completed
subsequent to June 30, 1995 and prior to August 28, 1996, and to the sale by the
Company in February 1996 of 4,476,000 shares of Class A Common Stock and the
application of net proceeds therefrom as if these events had occurred as of July
1, 1995. The Pro Forma Consolidated Statements of Income combine the historical
operations of the Company with the historical operations of the acquired
businesses prior to the dates the Company made such acquisitions, using the
purchase method of accounting. The pro forma operating results are not
necessarily indicative of the operating results that would have been achieved
had the acquisitions actually occurred at July 1, 1995. These Pro Forma
Consolidated Financial Statements are based on the assumptions set forth in the
notes to such statements.
PRO FORMA CONSOLIDATED BALANCE SHEET (1)
JUNE 30, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
Historical NCS Pro Forma
HealthCare and Acquired Offering Pro Forma as
Subsidiaries Companies (A) Pro Forma Adjustments(B) Adjusted
------------ ------------- --------- -------------- --------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents.......... $ 21,460 $(17,892) $ 3,568 $102,892 $106,460
Accounts receivable, net........... 27,762 5,200 32,962 --- 32,962
Inventories........................ 7,487 2,763 10,250 --- 10,250
Prepaid expenses and other assets.. 2,484 205 2,689 --- 2,689
------- -------- ------- ------- -------
Total current assets............. 59,193 (9,724) 49,469 102,892 152,361
Property, plant and equipment, net.... 10,283 2,727 13,010 --- 13,010
Goodwill, net......................... 39,101 26,930 66,031 --- 66,031
Other assets, net..................... 2,091 1,309 3,400 3,400
------- -------- ------- ------- -------
Total assets....................... $110,668 $ 21,242 $131,910 $102,892 $234,802
======= ======== ======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable................... $ 4,968 $ 719 $ 5,687 $ --- $ 5,687
Accrued expense and other current
liabilities...................... 5,088 1,639 6,727 --- 6,727
Current portion of long term debt.. 801 5,196 5,997 (4,000) 1,997
-------- -------- ------- ------- -------
Total current liabilities........ 10,857 7,554 18,411 (4,000) 14,411
Long-term debt, excluding current
portion............................ 1,961 3,088 5,049 --- 5,049
Convertible subordinated debentures... 6,549 --- 6,549 --- 6,549
Minority interests.................... 201 --- 201 --- 201
Stockholders' equity:
Preferred stock.................... --- --- --- --- ---
Common Stock, par value $.01 per
share:
Class A........................... 56 3 59 39 98
Class B........................... 66 --- 66 (3) 63
Paid-in capital.................... 84,907 10,597 95,504 106,856 202,360
Retained earnings.................. 6,071 --- 6,071 --- 6,071
-------- -------- -------- -------- --------
Total stockholders' equity........ 91,100 10,600 101,700 106,892 208,592
-------- -------- -------- -------- --------
Total liabilities and
stockholders' equity............. $110,668 $ 21,242 $131,910 $102,892 $234,802
======== ======== ======== ======== ========
- -----------------
<FN>
(1) See accompanying Notes to Pro Forma Consolidated Balance Sheet.
</TABLE>
<PAGE> 14
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1996
(A) Reflects acquisitions completed subsequent to June 30, 1996 and prior
to August 28, 1996 by the Company, all of which were accounted for
under the purchase method, at an aggregate purchase price of
$36,705,000.
(B) Reflects the sale of the 3,650,000 shares of Class A Common Stock by
the Company pursuant to a registered public offering in September 1996
and the receipt and application of the proceeds therefrom as follows:
(IN THOUSANDS)
--------------
<TABLE>
<CAPTION>
<S> <C>
Gross proceeds from the offering.................... $113,150
Underwriting discounts and commissions......... (5,658)
Estimated expenses of the offering.................. (600)
-------
Net proceeds ....................................... 106,892
Repayment of notes payable.......................... (4,000)
-------
Net increase in cash and cash equivalents........... $102,892
=======
</TABLE>
Also reflects the conversion, by certain Selling Stockholders, of 196,268 shares
of Class B Common Stock into an equal number of shares of Class A Common Stock
in connection with the registered public offering.
<PAGE> 15
PRO FORMA CONSOLIDATED STATEMENT OF INCOME (1)
YEAR ENDED JUNE 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL
----------------------------------
NCS HEALTHCARE ACQUIRED PRO FORMA PRO
AND SUBSIDIARIES COMPANIES(B) ADJUSTMENTS FORMA
---------------- ------------ ----------- -----
<S> <C> <C> <C> <C>
Revenues.................................... $113,281 $64,255 $ --- 177,536
Cost of revenues............................ 82,415 48,430 --- 130,845
--------- ------- ------ --------
Gross profit................................ 30,866 15,825 --- 46,691
Selling, general and administrative
expenses.................................. 22,236 11,132 381(C) 33,749
Special compensation........................ 2,811(A) --- --- 2,811
----- ------- ------ --------
Operating income (loss)..................... 5,819 4,693 (381) 10,131
Interest expense............................ (2,282) (567) 1,244(D) (1,605)
Interest income............................. 671 --- (671)(D) ---
------- ------- ------- --------
Income before income taxes.................. 4,208 4,126 192 8,526
Income tax expense.......................... 1,852 1,814 84 3,750
----- ------- ------ --------
Net income.................................. $2,356 $ 2,312 $ 108 $ 4,776
====== ======= ====== ========
Net income per share........................ $ 0.26 $ 0.38
======= ========
Shares used in the computation.............. 8,971 12,695
===== ========
- -------------------
<FN>
(1) See accompanying Notes to Pro Forma Consolidated Statement of Income
</TABLE>
2
<PAGE> 16
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED JUNE 30, 1996
(IN THOUSANDS)
(A) Represents a one-time, non-recurring charge in connection with the
termination of performance incentive agreements with prior owners of
certain acquired companies.
(B) The historical statement of income data for the acquired companies for
the year ended June 30, 1996 represents the results of operations of
such companies from July 1, 1995 to the earlier of their respective
dates of acquisition or June 30, 1996. Each of the acquisitions has
been accounted for as a purchase. Accordingly, the results of the
operations of each such acquired company are included in the Company's
results of operations from the date of acquisition. The table below
presents the details of the historical operations of the acquired
companies.
The details of the historical operations of the acquired companies
for the periods from July 1, 1995 to the earlier of their respective dates of
acquisition or June 30, 1996 are as follows:
<TABLE>
<CAPTION>
ACQUIRED COMPANY
(DATE OF ACQUISITION)
--------------------------------------------------------------------------------
Uni-Care IPAC Thrifty Others Others
(May 15, (August 1, (August 13, (Fiscal (Fiscal
1996) 1996) 1996) 1996) 1997) Total
----------- ------------- ------------- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues................................ $14,500 $13,829 $11,627 $12,821 $11,478 $64,255
Cost of revenues........................ 11,165 10,164 8,604 9,919 8,578 48,430
------ ------ ------ ------ ------ ------
Gross profit............................ 3,335 3,665 3,023 2,902 2,900 15,825
Selling, general and
administrative expenses.............. 2,300 3,079 1,789 1,618 2,346 11,132
----- ------ ------ ------ ------ ------
Operating income........................ 1,035 586 1,234 1,284 554 4,693
Interest expense........................ --- 324 159 80 4 567
------ ------ ------ ------ ------ ------
Income before income taxes.............. 1,035 262 1,075 1,204 550 4,126
Income tax expense...................... 455 115 473 529 242 1,814
------ ------ ------ ------ ------ ------
Net income.............................. $ 580 $ 147 $ 602 $ 675 $ 308 $ 2,312
====== ====== ======= ======= ======= =======
</TABLE>
(C) The adjustment to selling, general and administrative expenses consists
of (i) a reduction of $1,012 to acquired companies' historical amounts
of compensation for owners and certain employee benefits for the
difference between such historical amounts and amounts specified in the
post-acquisition employment contracts for such individuals and
continuing benefit programs and (ii) a $1,393 adjustment to increase
amortization of the excess of cost over the fair value of net assets of
the acquired companies, using a 30-year amortization schedule.
(D) The adjustments reflect the reduction in interest expense and the
elimination of interest income, had the entire net proceeds of
approximately $67.0 million from the Company's initial public offering
in February 1996 been used to reduce certain outstanding indebtedness
and to fund the acquisitions, as if such offering had occurred on July
1, 1995.
3
