<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 20, 1998
SUPERIOR CONSULTANT HOLDINGS CORPORATION
----------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
--------
(State or Other Jurisdiction of Incorporation)
0-21485 38-3306717
- ------- ----------
(Commission File Number) (IRS Employer Identification No.)
4000 TOWN CENTER, SUITE 1100,
SOUTHFIELD, MICHIGAN 48075
-------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
(248) 386-8300
--------------
(Registrant's Telephone Number, Including Area Code)
NONE
----
(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
On September 2, 1998, the Company filed a Current Report on Form 8-K with
respect to the acquisition by the Company's wholly-owned subsidiary, Enterprise
Consulting Group, Inc. of the assets of Aviant Information, Inc., an information
technology consulting business and a wholly owned subsidiary of Whittaker
Corporation. Such Current Report indicated that the required financial
statements and pro forma financial information would be filed within sixty (60)
days of the due date of this Form 8-K.
The financial statements and pro forma financial information are filed herewith
as follows:
(a) Financial statements of business acquired
Financial statements of the business acquired as of and for the
periods ended October 31, 1997 and July 31, 1998 are included
herein.
(b) Pro forma financial information
Pro forma financial information for the year ended December 31,
1997 and the six months ended June 30, 1998 are included herein.
2
<PAGE> 3
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 hereunto duly authorized.
SUPERIOR CONSULTANT HOLDINGS
CORPORATION
Date: November 2, 1998 By: /s/James T. House
---------------------------------------
James T. House, Chief Financial Officer
(Signature)
3
<PAGE> 4
Index to Financial Statements and Pro Forma Financial Information
<TABLE>
<CAPTION>
Page
<S> <C>
Report of Independent Certified Public Accountants............................................... 5
Balance Sheets - October 31, 1997 and July 31, 1998 (unaudited).................................. 6
Statements of Operations - For the period from January 14, 1997 (date of
inception) through October 31, 1997 and the nine
months ended July 31, 1998 (unaudited)........................................................... 7
Statement of Deficit in Stockholder's Equity - For the period from January 14,
1997 (date of inception) through October 31, 1997 and
the nine months ended July 31, 1998 (unaudited).................................................. 8
Statements of Cash Flows - For the period from January 14, 1997 (date of
inception) through October 31, 1997 and the nine
months ended July 31, 1998 (unaudited)........................................................... 9
Notes to Financial Statements.................................................................... 10
Pro Forma Unaudited Consolidated Condensed Statement of
Operations - For the year ended December 31, 1997................................................ 15
Pro Forma Unaudited Consolidated Condensed Balance Sheet -
June 30, 1998.................................................................................... 16
Pro Forma Unaudited Consolidated Condensed Statement of
Operations - For the six months ended June 30, 1998.............................................. 17
Notes to Pro Forma Unaudited Consolidated Condensed
Financial Information............................................................................ 18
</TABLE>
4
<PAGE> 5
Report of Independent Certified Public Accountants
To the Board of Directors
Aviant Information, Inc.
We have audited the accompanying balance sheet of Aviant Information, Inc.
(a Delaware corporation and a wholly-owned subsidiary of Whittaker Corporation)
as of October 31, 1997, and the related statements of operations, stockholder's
equity and cash flows for the period from January 14, 1997 (date of inception)
through October 31, 1997. These financial statements are the responsibility of
the Company's 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 financial position of Aviant Information, Inc. as
of October 31, 1997, and the results of its operations and its cash flows for
the period from January 14, 1997 (date of inception) through October 31, 1997,
in conformity with generally accepted accounting principles.
/s/GRANT THORNTON LLP
Detroit, Michigan
October 16, 1998
5
<PAGE> 6
Aviant Information, Inc.
Balance Sheets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
July 31,
October 31, 1998
ASSETS 1997 (unaudited)
----------- -----------
<S> <C> <C>
Current Assets
Accounts receivable, net of allowance for doubtful
accounts of $1,351,836 at October 31, 1997 and
$535,320 at July 31, 1998 .............................. $ 3,635,768 $ 1,999,060
Due from affiliates ........................................ 1,765,397 1,728,804
Prepaids and other ......................................... 52,699 92,905
----------- -----------
Total current assets .......................... 5,453,864 3,820,769
Property and equipment, net .................................... 367,720 326,494
Other assets ................................................... 160,166 43,993
----------- -----------
Total Assets .................................. $ 5,981,750 $ 4,191,256
=========== ===========
LIABILITIES AND DEFICIT IN STOCKHOLDER'S EQUITY
Current Liabilities
Bank overdraft ............................................. $ 85,419 $ 117,479
Due to parent .............................................. 909,502 4,346,324
Accounts payable ........................................... 492,817 47,026
Accrued liabilities ........................................ 2,753,676 1,162,792
Customer advances .......................................... 1,263,269 850,531
----------- -----------
Total Current Liabilities ..................... 5,504,683 6,524,152
Commitment (Note 8) ............................................ -- --
Stockholder's equity (deficit)
Common stock, authorized 10,000 shares of
$1 par value, 1,000 shares issued and outstanding ....... 1,000 1,000
Additional paid-in capital ................................. 4,199,667 4,199,667
Accumulated deficit ........................................ (3,723,600) (6,533,563)
----------- -----------
Total stockholder's equity (deficit) .......... 477,067 (2,332,896)
----------- -----------
Total Liabilities and Stockholder's Equity .... $ 5,981,750 $ 4,191,256
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
Aviant Information, Inc.
Statements of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period from
January 14, Nine
1997 (date Months
of inception) Ended
through July 31,
October 31, 1998
1997 (unaudited)
------------- ------------
<S> <C> <C>
Revenues............................................................... $ 5,350,090 $ 5,956,165
Costs and expenses
Cost of services................................................... 5,345,303 4,782,663
Selling, general and administrative expenses....................... 3,740,887 3,983,465
------------- ------------
Total costs and expenses...................................... 9,086,190 8,766,128
------------- ------------
Loss from operations.......................................... (3,736,100) (2,809,963)
Other income, principally interest income.............................. 12,500 -
------------- ------------
Loss before income taxes...................................... (3,723,600) (2,809,963)
Income tax benefit..................................................... - -
------------- ------------
Net loss...................................................... $ (3,723,600) $ (2,809,963)
============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 8
Aviant Information, Inc.
Statement of Deficit in Stockholder's Equity
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Additional
Common Stock Paid-In Accumulated
Shares Amount Capital Deficit Total
------- ------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Issuance of 1,000 shares
of common stock................. 1,000 $1,000 $4,199,667 $ - $ 4,200,667
Net loss............................ - - - (3,723,600) (3,723,600)
----- ------ --------- ---------- ----------
Balance at October 31, 1997......... 1,000 1,000 4,199,667 (3,723,600) 477,067
Net loss (unaudited)................ - - - (2,809,963) (2,809,963)
----- ------ --------- ---------- ----------
Balance at July 31, 1998
(unaudited)..................... 1,000 $1,000 $4,199,667 $(6,533,563) $(2,332,896)
====== ======= =========== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE> 9
Aviant Information, Inc.
Statements of Cash Flows
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period from
January 14, Nine
1997 (date Months
of inception) Ended
through July 31,
October 31, 1998
1997 (unaudited)
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net loss........................................................... $(3,723,600) $(2,809,963)
Adjustments to reconcile net loss to net cash
used in operating activities
Depreciation and amortization................................ 274,339 235,477
Changes in operating assets and liabilities:
Accounts receivable...................................... (3,635,768) 1,636,708
Prepaids and other....................................... (52,699) (40,206)
Due from affiliates...................................... (1,765,397) 36,593
Other assets............................................. (160,166) 116,173
Bank overdraft........................................... 85,419 32,060
Accounts payable......................................... 492,817 (445,791)
Accrued liabilities...................................... 2,753,676 (1,590,884)
Customer advances........................................ 1,263,269 (412,738)
---------- ----------
Net cash used in operating activities................. (4,468,110) (3,242,571)
Cash flows used in investing activities:
Purchases of property and equipment ............................... (642,059) (194,251)
---------- ----------
Net cash used in investing activities................. (642,059) (194,251)
Cash flows provided by financing activities:
Net receipts from parent........................................... 909,502 3,436,822
Issuance of common stock........................................... 4,200,667 -
---------- ----------
Net cash provided by financing activities............. 5,110,169 3,436,822
Net change in cash and cash equivalents.............................. - -
Cash and cash equivalents, beginning of period......................... - -
---------- ----------
Cash and cash equivalents, end of period............................... $ - $ -
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE> 10
Aviant Information, Inc.
Notes to Financial Statements
October 31, 1997 and July 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
1. Organization and Nature of Operations
Aviant Information, Inc. (the Company) is a wholly-owned subsidiary of
Whittaker Corporation (Whittaker) which was formed in January 1997 to serve the
growing requirements of health care information management. By assessing network
needs, diagnosing problems and implementing corrective actions, the Company
addresses critical issues for health care operations such as network management,
collaborative communication, security management, remote-access implementation
and high-speed networking. The Company offers a full range of customizing
services in four main areas: network assessments, design/redesign, integration
and implementation and continuing services, for firms in the healthcare industry
throughout the United States.
2. Summary of Accounting Policies
A summary of the significant accounting policies consistently applied in
the preparation of the accompanying financial statements follows.
Property and Equipment
Property and equipment are stated at cost. Expenditures for major renewals
and improvements that extend the useful life of property and equipment are
capitalized. Expenditures for maintenance and repairs are charged to expense as
incurred.
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 revenue and expenses during the reporting
period. Actual results could differ from these estimates.
Revenue Recognition
The Company recognizes revenues as services are performed for projects
billed on a time and materials basis. On fixed-fee projects, the Company
recognizes revenue using the percentage of completion basis. Customer advances
represents billings and collections made in advance of services being performed.
Stock-Based Compensation
For options granted to employees, the Company follows the provisions of
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees.
10
<PAGE> 11
Aviant Information, Inc.
Notes to Financial Statements - Continued
October 31, 1997 and July 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
3. Property and Equipment
Property and equipment consist of the following:
<TABLE>
<CAPTION>
July 31,
October 31, 1998 Range
1997 (unaudited) of Life
--------- --------- ---------
<S> <C> <C> <C>
Machinery and equipment......................... $ 53,893 $ 57,306 3-5 years
Computer equipment.............................. 1,375,831 1,560,363 3-5 years
Furniture and fixtures.......................... 54,878 61,184 3-5 years
--------- ---------
1,484,602 1,678,853
Less accumulated depreciation....... 1,116,882 1,352,359
--------- ---------
$ 367,720 $ 326,494
=========== ===========
</TABLE>
4. Accrued Liabilities
<TABLE>
<CAPTION>
Accrued liabilities consist of the following:
July 31,
October 31, 1998
1997 (unaudited)
--------- ---------
<S> <C> <C>
Payroll and withholding taxes.................................... $ 432,936 $ 388,715
State and local taxes............................................ 104,385 10,438
Estimated costs to complete fixed
price contracts............................................... 1,242,288 213,622
Compensation..................................................... 965,388 451,519
Other............................................................ 8,679 98,498
--------- ---------
Total accrued liabilities............................ $2,753,676 $1,162,792
=========== ===========
</TABLE>
5. Income Taxes
The Company files its tax return as part of the Whittaker consolidated
group. Whittaker allocates tax amounts to its individual subsidiaries to
approximate the tax provision, assets and liabilities that would be recorded if
the entities filed their tax returns on a separate company basis.
The tax benefit that would be expected by applying the U.S. federal income
tax rate to the loss before income taxes has been eliminated by a valuation
allowance.
Deferred income taxes reflect the net tax effects of temporary differences
between the reported amounts of assets and liabilities in the financial
statements and the amounts used for income tax purposes. Significant components
of the Company's deferred tax assets include benefits from net operating losses
and compensation. All deferred tax assets have been eliminated by a valuation
allowance.
11
<PAGE> 12
Aviant Information, Inc.
Notes to Financial Statements - Continued
October 31, 1997 and July 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
6. Stock Options
On October 14, 1997 the 1997 Stock Option Plan of Aviant Information, Inc.
(the Plan) was adopted. The Plan provides for the granting of options to
purchase the common stock of the Company. The term of each option may be five or
ten years and become exercisable, with respect to an individual, in annual
installments of at least 25% of the total number of options granted to that
individual commencing one year from the grant date and in full upon the
consummation of an initial public offering of the common shares of the Company
or the transfer of more than 50% of the Company's common stock to a
non-affiliate of Aviant, Whittaker or the shareholders of Whittaker. The
exercise price of an option shall be at least the fair market value of the
common stock of the Company on the grant date of the option. During 1997 there
were 450,500 options granted under the Plan all of which were outstanding at
October 31, 1997. At October 31, 1997 there were no common shares of Aviant
which were publicly traded or quoted and therefore, per the terms of the Plan,
the exercise price was established by the Board of Directors at $0.50 per share.
At October 31, 1997 the weighted average remaining contractual life of options
under the Plan was 9.96 years and there were 1,549,500 shares reserved for
future grants under the Plan.
The fair value of each option is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions for grants in 1997: dividend yield of 0%, expected volatility of 0%,
risk-free interest rate of 5.7%, and expected life of 5 years.
Had compensation cost for the plan been determined based on the fair value
of all the options at the grant dates consistent with Statement of Financial
Accounting Standard No. 123, Accounting for Stock-Based Compensation, the
Company would have reported a pro forma net loss of approximately $3,872,265 for
the period ended October 31, 1997.
7. Related Party Transactions
During the period ended October 31, 1997 and for the nine months ended July
31, 1998 the Company was charged certain general and administrative expenses by
Whittaker Corporation totaling $189,000 and $284,000, respectively.
The amounts due from affiliates shown on the accompanying balance sheets
represent receivables due from brother/sister companies within the Whittaker
family. The amounts have no specific repayment terms and are non-interest
bearing.
The amounts due to parent shown on the accompanying balance sheets
represent borrowings from Whittaker Corporation. The amounts have no specific
repayment terms and are non-interest bearing.
12
<PAGE> 13
Aviant Information, Inc.
Notes to Financial Statements - Continued
October 31, 1997 and July 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
8. Commitment
The Company leases its office facilities under a lease agreement classified
as an operating lease. Future minimum lease payments under such noncancelable
operating lease as of October 31, 1997 follows:
<TABLE>
<CAPTION>
Years ending October 31:
<S> <C>
1998........................................ $ 62,000
1999........................................ 62,000
2000........................................ 62,000
2001........................................ 54,000
--------
Total future minimum lease payments. $ 240,000
=========
</TABLE>
Rent expense amounted to approximately $65,000 for the period ended
October 31, 1997 and $67,000 for the nine months ended July 31, 1998.
9. Major Customer
During the period ended October 31, 1997, the Company derived approximately
15% of its revenue from one customer. As of October 31, 1997, accounts
receivable from this customer comprised approximately 10% of total accounts
receivable.
10. Subsequent Event
Effective August 20, 1998, the Company was purchased by Enterprise
Consulting Group, Inc. (a subsidiary of Superior Consultant Holdings
Corporation) for approximately $5.1 million in cash.
13
<PAGE> 14
SUPERIOR CONSULTANT HOLDINGS CORPORATION AND SUBSIDIARIES
PRO FORMA UNAUDITED CONSOLIDATED CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
On August 20, 1998 Superior Consultant Holdings Corporation (the
Company), through its subsidiary, Enterprise Consulting Group, Inc. purchased
Aviant Information, Inc. for approximately $5,100,000 in cash.
The pro forma unaudited consolidated condensed statements of operations
for the year ended December 31, 1997 and the six months ended June 30, 1998
present the historical results of the Company combined with Aviant Information,
Inc. and the pro forma adjustments as if the purchase had been made at the
beginning of the periods presented. The pro forma unaudited consolidated
condensed balance sheet as of June 30, 1998 presents the financial condition of
the Company combined with Aviant Information, Inc. and the pro forma adjustments
as if the purchase had been made on June 30, 1998. The pro forma financial
information should be read in conjunction with the Company's historical
financial statements and notes thereto contained in the Company's Form 10-K for
the year ended December 31, 1997, and Form 10-Q for the six months ended June
30, 1998. The pro forma results do not reflect any benefit from economies which
might be achieved from combined operations. These pro forma results have been
prepared for comparative purposes only and do not purport to be indicative of
the financial condition or results of operations which actually would have
occurred if the acquisition had taken place on the basis presumed above, nor are
they indicative of future combined operations.
14
<PAGE> 15
SUPERIOR CONSULTANT HOLDINGS CORPORATION AND SUBSIDIARIES
PRO FORMA UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVIANT PRO
INFORMATION, FORMA PRO
SUPERIOR INC. ADJUSTMENTS FORMA
-------- ---------- ----------- -------
<S> <C> <C> <C> <C>
Revenues...................................................... $ 76,895 $ 5,350 $ - $ 82,245
Cost and expenses
Cost of services.......................................... 39,260 5,345 - 44,605
Selling, general and administrative expenses.............. 30,378 3,741 226(a) 34,345
Executive compensation expense............................ 858 - - 858
----------- -------- -------- ---------
Total costs and expenses..................... 70,496 9,086 226 79,808
----------- -------- -------- ---------
Earnings (loss) from operations.............. 6,399 (3,736) (226) 2,437
Interest expense.............................................. 123 - - 123
Other (income), principally interest income................... (2,851) (12) - (2,863)
Costs incurred in connection with mergers..................... 917 - - 917
----------- -------- -------- ---------
Earnings (loss) before income taxes.......... 8,210 (3,724) (226) 4,260
Income taxes (benefit)........................................ 3,625 - (1,744)(b) 1,881
----------- -------- -------- ---------
Net earnings (loss).......................... $ 4,585 $ (3,724) $ 1,518 $ 2,379
=========== ======== ======== =========
Net earnings per share
Basic..................................................... $ 0.54 $ 0.28
=========== =========
Diluted................................................... $ 0.53 $ 0.27
=========== =========
Weighted average number of common shares outstanding
Basic..................................................... 8,519 8,519
=========== =========
Diluted................................................... 8,670 8,670
=========== =========
</TABLE>
See notes to pro forma consolidated condensed statements.
15
<PAGE> 16
SUPERIOR CONSULTANT HOLDINGS CORPORATION AND SUBSIDIARIES
PRO FORMA UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEET
JUNE 30, 1998
(IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVIANT PRO
INFORMATION, TOTAL FORMA PRO
SUPERIOR INC. COMBINED ADJUSTMENTS FORMA
-------- ---------- --------- ----------- -------
<S> <C> <C> <C> <C> <C>
Assets
Cash............................................. $ 1,162 $ - $ 1,162 $ - $ 1,162
Short-term investments........................... 67,756 - 67,756 (4,543)(a) 63,213
Accounts receivable, net......................... 25,282 1,999 27,281 - 27,281
Due from affiliates.............................. - 1,729 1,729 (1,729)(a) -
Other current assets............................. 2,387 93 2,480 - 2,480
Property and equipment, net...................... 11,071 326 11,397 - 11,397
Goodwill, net.................................... 11,550 - 11,550 2,081(a) 13,631
Other long term assets........................... 4,608 44 4,652 - 4,652
----------- -------- ---------- -------- ----------
Total Assets........................ $ 123,816 $4,191 $128,007 $ (4,191) $123,816
=========== ======== ========== ======== ==========
Liabilities and Stockholders' Equity
Bank overdraft................................... $ - $ 117 $ 117 (117)(a) $ -
Due to parent.................................... - 4,346 4,346 (4,346)(a) -
Accounts payable................................. 1,229 47 1,276 (47)(a) 1,229
Accrued liabilities.............................. 5,302 1,163 6,465 (1,163)(a) 5,302
Customer advances................................ - 851 851 (851)(a) -
Deferred revenue................................. 1,045 - 1,045 - 1,045
Other liabilities................................ 1,254 - 1,254 - 1,254
Common stock..................................... 103 1 104 (1)(a) 103
Additional paid-in capital....................... 107,820 4,200 112,020 (4,200)(a) 107,820
Retained earnings (accumulated deficit).......... 7,742 (6,534) 1,208 6,534 (a) 7,742
Stockholder's notes receivable................... (679) - (679) - (679)
----------- -------- ---------- -------- ----------
Total Liabilities and
Stockholder's Equity............. $ 123,816 $ 4,191 $ 128,007 $ (4,191) $ 123,816
=========== ======== ========== ======== ==========
</TABLE>
See notes to pro forma consolidated condensed statements.
16
<PAGE> 17
SUPERIOR CONSULTANT HOLDINGS CORPORATION AND SUBSIDIARIES
PRO FORMA UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVIANT PRO
INFORMATION, FORMA PRO
SUPERIOR INC. ADJUSTMENTS FORMA
-------- ---------- ----------- --------
<S> <C> <C> <C> <C>
Revenues...................................................... $ 52,180 $ 5,956 $ - $ 58,136
Cost and expenses
Cost of services.......................................... 26,814 4,783 - 31,597
Selling, general and administrative expenses.............. 20,565 3,983 123 (a) 24,671
--------- --------- -------- ---------
Total costs and expenses..................... 47,379 8,766 123 56,268
--------- --------- -------- ---------
Earnings (loss) from operations.............. 4,801 (2,810) (123) 1,868
Other (income), principally interest income................... (2,622) - - (2,622)
--------- --------- -------- ---------
Earnings (loss) before income taxes.......... 7,423 (2,810) (123) 4,490
Income taxes (benefit)........................................ 2,989 - (1,181)(b) 1,808
--------- --------- -------- ---------
Net earnings (loss).......................... $ 4,434 $ (2,810) $ 1,058 $ 2,682
========= ========= ======== =========
Net earnings per share
Basic..................................................... $ 0.43 $ 0.26
========= =========
Diluted................................................... $ 0.42 $ 0.25
========= =========
Weighted average number of common shares outstanding
Basic..................................................... 10,236 10,236
========= =========
Diluted................................................... 10,530 10,530
========= =========
</TABLE>
See notes to pro forma consolidated condensed statements.
17
<PAGE> 18
Superior Consultant Holdings Corporation and Subsidiaries
Notes To Pro Forma Unaudited Consolidated Condensed Financial Information
- --------------------------------------------------------------------------------
The accompanying pro forma unaudited consolidated condensed financial
statements presents the financial condition and results of operations of
Superior Consultant Holdings Corporation and Subsidiaries (Superior) giving
effect to the acquisition of Aviant Information, Inc. The purchase price was
$3,395,500, plus the value of accounts receivable, less customer advances not
included in accounts receivable.
Pro forma adjustments are as follows:
For the year ended December 31, 1997:
(a) Adjust goodwill amortization based on the cost of the business acquired,
using an amortization period of fifteen years.
(b) Adjustment to reflect tax expense of the combined operations after giving
effect to the above adjustment.
Balance Sheet as of June 30, 1998:
(a) Adjustment to record the purchase and allocate the purchase price on a
preliminary basis.
For the six months ended June 30, 1998:
(a) Adjust goodwill amortization based on the cost of the business acquired,
using an amortization period of fifteen years.
(b) Adjustment to reflect tax expense of the combined operations after giving
effect to the above adjustment.
18
