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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 1, 2000
HealthTronics, Inc.
(Exact name of the Registrant as specified in its charter)
Georgia 333-66977 58-2210668
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation and organization) identification No.)
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1841 West Oak Parkway, Suite A
Marietta, Georgia 30062
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
770-419-0691
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Item 2. Acquisition or Disposition of Assets.
On June 1, 2000, the Company sold the assets purchased from Health
Horizons on January 24, 2000 to New Jersey Kidney Stone Center LLC (the "LLC")
for $250,000 in cash, a $600,000 note receivable and the assumption of certain
liabilities, including lease, trade and accounts payable and obligations under
regulatory permits. The assets sold included a lithotripter and related medical
equipment, other furniture, equipment, patient records and other related assets
used in New Jersey Kidney Stone Treatment Center. The purchase price was
determined and negotiated by the parties based on the expected annual cash flow
to be generated by the assets purchased. The Company pre-negotiated this sale of
its interest in the assets purchased to the LLC which will be managed by the
Company and of which the Company will ultimately own less than 20%. The
remaining partners will be independent of the Company.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
b. Pro Forma Financial Information
The following unaudited combined pro forma financial statements relative
to the acquisition for the quarter ended March 31, 2000 is provided
herein:
(1) Pro Forma Balance Sheets as of March 31, 2000
(2) Pro Forma Statements of Income for the quarter ended March 31,
2000
(3) Notes to the unaudited pro forma financial statements for the
quarter ended March 31, 2000
The following unaudited combined pro forma financial statements give
effect to the disposition by the Company of certain assets and
liabilities, as if the disposition had occurred on January 1 of the
period presented. The pro forma adjustments are based upon estimates,
currently available information and certain assumptions management deems
appropriate. The unaudited combined pro forma financial data presented
herein are not necessarily indicative of the results that the Company
would have obtained had such events occurred at the beginning of the
period, as assumed, or of the future results of the Company.
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a. Exhibits
2.1 Asset Purchase Agreement dated May 29, 2000
Item 7(b) - Pro Forma Financial Information
HealthTronics, Inc. and Subsidiaries
Pro Forma Balance Sheets
AS OF MARCH 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL
--------------
HEALTHTRONICS,
INC. DISPOSITION (1) PRO FORMA
-------------- --------------- ------------
<S> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 4,013,233 $ 4,013,233
Trade accounts receivable, net 4,688,107 $ 4,688,107
Inventory 2,107,631 $ 2,107,631
Note receivable, current $ 0
Due from affiliated partnerships 168,112 $ 168,112
Vendor deposits 728,813 $ 728,813
Prepaid expenses 107,100 $ 107,100
Deferred income taxes 375,751 $ 375,751
------------ ------------- ------------
TOTAL CURRENT ASSETS 12,188,747 12,188,747
Property and equipment, at cost:
Medical devices placed in service 9,857,187 $ 9,857,187
Office equipment, furniture and fixtures 175,584 $ 175,584
Vehicles and accessories 1,535,577 $ 1,535,577
------------ ------------- ------------
11,568,348 11,568,348
Less accumulated depreciation (2,856,847) $ (2,856,847)
------------ ------------- ------------
NET PROPERTY AND EQUIPMENT 8,711,501 8,711,501
Note receivable, noncurrent -- $ 0
Partnership investments 328,402 $ 328,402
Goodwill, net 3,595,258 $ 3,595,258
Patent license 51,674 $ 51,674
Other assets 43,486 $ 43,486
------------ ------------- ------------
TOTAL ASSETS $ 24,919,068 24,919,068
============ ============= ============
</TABLE>
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<TABLE>
<CAPTION>
HISTORICAL
--------------
HEALTHTRONICS,
INC. DISPOSITION (1) PRO FORMA
-------------- --------------- ------------
<S> <C> <C> <C>
CURRENT LIABILITIES
Trade accounts payable $ 1,540,729 $ 1,540,729
Customer deposits 749,883 $ 749,883
Income taxes payable 422,791 (111,008) $ 311,783
Warranty accrual 608,403 $ 608,403
Other accrued expenses 857,701 $ 857,701
Deferred profit on service contracts 167,167 $ 167,167
Current portion of long-term debt 1,258,725 $ 1,258,725
----------- ------------ ------------
TOTAL CURRENT LIABILITIES 5,605,399 (111,008) 5,494,391
Long-term debt, less current portion 2,147,908 $ 2,147,908
Deferred income taxes 12,977 $ 12,977
Deferral of profit on medical device sales to
related parties 244,194 $ 244,194
Minority interest 2,246,780 258,159 $ 2,504,939
----------- ------------ ------------
TOTAL LIABILITIES 10,257,258 147,151 10,404,409
Shareholders' equity:
Common stock 12,336,371 $ 12,336,371
Retained earnings 2,325,439 (147,151) $ 2,178,288
----------- ------------ ------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $24,919,068 $ 24,919,068
=========== ============ ============
</TABLE>
(1) The Company sold assets to an LLC in which the Company maintains a 30%
financial interest and is the sole manager. Based upon the Company's ability to
exercise control over the operating and financial policies of the LLC, the
Company intends to consolidate the LLC and as such, the assets sold will be
included in the consolidated financial statements of the Company. As a result of
this transaction, the pro forma adjustment reflects the transaction from the
date of acquisition of the assets (January 24, 2000).
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HealthTronics, Inc. and Subsidiaries
Pro Forma Condensed Statements of Income
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL
--------------
HEALTHTRONICS,
INC. DISPOSITION (1) PRO FORMA
-------------- -------------- ------------
<S> <C> <C> <C>
Net revenue $ 7,623,520 $ 7,623,520
Cost of goods sold, rentals
and services provided 3,411,119 3,411,119
------------ -------------- ------------
4,212,401 4,212,401
General and administrative expenses 2,134,258 2,134,258
------------ -------------- ------------
2,078,143 2,078,143
Equity in earnings of unconsolidated
partnership 40,508 40,508
Partnership distributions from cost
based investments 37,592 37,592
Interest expense (81,905) (81,905)
Interest income 58,274 58,274
------------ -------------- ------------
Income before minority interest and
income taxes 2,132,612 2,132,612
Minority interest (1,227,074) (258,159) (1,485,233)
------------ -------------- ------------
Income before income taxes 905,538 (258,159) 647,379
Provision for income taxes (398,804) 111,008 (287,796)
------------ -------------- ------------
Net income $ 506,734 $ (147,151) $ 359,583
============ ============== ============
Basic and diluted income per common share:
Basic $ 0.05 $ 0.03
============ ============
Diluted $ 0.05 $ 0.03
============ ============
Weighted average common shares outstanding:
Basic 10,719,822 10,719,822
============ ============
Diluted 11,163,469 11,163,469
============ ============
</TABLE>
(1) The Company sold assets to an LLC in which the Company maintains a 30%
financial interest and and is the sole manager. Based upon the Company's ability
to exercise control over the operating and financial policies of the LLC, the
Company intends to consolidate the LLC and as such, the assets sold will be
included in the consolidated financial statements of the Company. As a result of
this transaction, the pro forma adjustment reflects the transaction from the
date of acquisition of the assets (January 24, 2000).
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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.
HealthTronics, Inc.
Dated:
June 15, 2000 By: /s/ Victoria W. Beck
--------------------------
Victoria W. Beck
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
2.1 Asset Purchase Agreement dated May 29, 2000
