<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended: June 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number 333-25257
HORIZON Pharmacies, Inc.
(Exact name of small business issuer as specified in its charter)
TEXAS 75-2441557
(State or other jurisdiction (I.R.S. Employer of
of incorporation or organization) Identification Number)
275 W. Princeton Drive
Princeton, Texas 75407
(Address of principal executive offices)
(972) 736-2424
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Title of Each Class Outstanding at October 22, 1997
Common stock, par value $.01 per share 2,481,615
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
<PAGE>
Explanatory Note
On August 22, 1997 HORIZON Pharmacies, Inc. (the "Registrant") filed with
the Securities and Exchange Commission its Quarterly Report on Form 10-QSB for
the quarterly period ended June 30, 1997 (the "Initial 10-QSB"). In Item 5 of
the Initial 10-QSB the Registrant reported the acquisition of two pharmacies on
August 12 and August 16, 1997, which acquisitions had not previously been
reported on Form 8-K. The Registrant did not file the financial statements for
such pharmacies required by Form 8-K with the Initial 10-QSB; rather, as
permitted by Item 7(a)(4) of Form 8-K, the Registrant is herewith filing such
financial statements within 60 days after the date that the initial report on
Form 8-K must be filed.
ITEM 5. OTHER INFORMATION
2
<PAGE>
REVCO, INC.
DBA NORTHRIDGE PHARMACY
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1996
WITH REPORT OF INDEPENDENT AUDITORS
3
<PAGE>
The Board of Directors and Shareholders October 19, 1997
Revco, Inc., dba Northridge Pharmacy
REPORT OF INDEPENDENT AUDITORS
We have audited the accompanying balance sheet of Revco, Inc., dba Northridge
Pharmacy as of December 31, 1996, and the related statement of income,
shareholders' equity and cash flows for the year then ended. 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 Revco, Inc., Northridge
Pharmacy at December 31, 1996, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted
accounting principles.
Howard & Waltrip, P.C.
Certified Public Accountants
Dallas, Texas
4
<PAGE>
REVCO INC
DBA NORTHRIDGE PHARMACY
BALANCE SHEETS
DECEMBER 31, JUNE 30,
ASSETS 1996 1997
------------ ----------
(Unaudited)
Current assets:
Cash $ 10,087 $ 20,206
Accounts receivable-trade 38,829 18,528
Inventories, lower of cost or market 151,647 184,858
-------- --------
Total current assets 200,563 223,592
Fixed assets:
Furniture & fixtures 5,660 5,660
Machinery and equipment 5,239 5,239
Autos and trucks 8,743 8,743
Leasehold improvements 15,198 15,198
Accumulated depreciation (8,247) (9,957)
-------- --------
Total net fixed assets 26,593 24,883
-------- --------
TOTAL ASSETS $227,156 $248,475
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable-trade $ 35,254 $ 47,680
Accrued expenses 6,462 6,626
-------- --------
Total current liabilities 41,716 54,306
Shareholders' equity
Capital stock 1,000 1,000
Treasury stock (60,000) (60,000)
Retained earnings 244,440 253,169
-------- --------
Total shareholders' equity 185,440 194,169
-------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $227,156 $248,475
-------- --------
-------- --------
See accompanying notes.
5
<PAGE>
REVCO INC
DBA NORTHRIDGE PHARMACY
STATEMENTS OF INCOME
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
-----------------
1996 1996 1997
------------ -------- --------
(Unaudited)
Net sales $1,397,812 $701,940 $642,434
Cost of sales 1,024,763 504,616 462,553
---------- -------- --------
Gross profit 373,049 197,324 179,881
---------- -------- --------
Operating expenses:
Selling, general and administrative 356,978 174,199 165,549
Depreciation 2,797 1,174 1,710
---------- -------- --------
Total operating expenses 359,775 175,373 167,259
Income from operations 13,274 21,951 12,622
Other income (expense):
Loss on sale of assets (716) 0 0
---------- -------- --------
Net income before taxes 12,558 21,951 12,622
Income taxes 1,901 3,304 1,893
---------- -------- --------
Net income $10,657 $18,647 $10,729
---------- -------- --------
---------- -------- --------
See accompanying notes.
6
<PAGE>
REVCO INC
DBA NORTHRIDGE PHARMACY
STATEMENTS OF SHAREHOLDERS' EQUITY
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
-----------------
1996 1996 1997
------------ -------- --------
(Unaudited)
Balance, Beginning of period $235,783 $235,783 $244,440
Net income 10,657 18,647 10,729
Dividends (2,000) (2,000) (2,000)
---------- -------- --------
Balance, End of Period $244,440 $252,430 $253,169
---------- -------- --------
---------- -------- --------
See accompanying notes.
7
<PAGE>
REVCO INC
DBA NORTHRIDGE PHARMACY
STATEMENTS OF CASH FLOWS
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
-----------------
1996 1996 1997
------------ -------- --------
(Unaudited)
Operating activities:
Net income $10,657 $18,647 $10,729
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 2,797 1,174 1,710
Change in operating assets and
liabilities:
Accounts receivable-trade (17,855) 4,907 20,301
Inventories 10,229 (28,382) (33,211)
Accounts payable-trade 254 15,000 12,426
Accrued expenses (1,869) 99 164
---------- -------- --------
Net cash provided by operating activities 4,213 11,445 12,119
Investing activities:
Purchase of fixed assets (18,394) (9,446) 0
Financing activities:
Dividends paid (2,000) (2,000) (2,000)
---------- -------- --------
Net increase (decrease) in cash (16,181) (1) 10,119
Cash at beginning of period 26,268 26,268 10,087
---------- -------- --------
Cash at end of period $10,087 $26,267 $20,206
---------- -------- --------
---------- -------- --------
See accompanying notes.
8
<PAGE>
REVCO, INC., dba NORTHRIDGE PHARMACY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. Summary of significant accounting policies
Organization
REVCO, INC., dba NORTHRIDGE PHARMACY, A Texas corporation (the "Company"), owns
and operates a retail pharmacy in Mesquite, Texas.
Basis of accounting
The accompanying financial statements are prepared on the accrual basis of
accounting and accordingly reflect revenues at the time products are sold or
services rendered. Expenses are recognized when the products are received or
the services are performed.
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 amounts reported in the financial statements and accompanying notes.
Actual results may differ from those estimates, and such differences may be
material to the financial statements.
Depreciation
Depreciation of equipment is provided on a straight-line basis over the
estimated useful lives of the assets.
Unaudited financial statements
The accompanying unaudited financial statements include all adjustments,
consisting of normal, recurring accruals, which the Company considers necessary
for a fair presentation of the financial position and the results of operations
for the indicated periods.
2. Leases
The Company leases the retail store facilities under an operating lease to
expire in December 1997. Rent expense is $2,650 per month with total rent paid
1996 of $31,800.
3. Subsequent events
On August 12, 1997 the Company sold a majority of its assets to HORIZON
Pharmacies, Inc. and ceased operations.
9
<PAGE>
DOWNEY DRUG, INC.
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1996
WITH REPORT OF INDEPENDENT AUDITORS
10
<PAGE>
The Board of Directors and Shareholders October 21, 1997
Downey Drug, Inc.
REPORT OF INDEPENDENT AUDITORS
We have audited the accompanying balance sheet of Downey Drug, Inc. as of
December 31, 1996, and the related statement of income, shareholders' equity and
cash flows for the year then ended. 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 Downey Drug, Inc. at December
31, 1996, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
Howard & Waltrip, P.C.
Certified Public Accountants
Dallas, Texas
11
<PAGE>
DOWNEY DRUG, INC.
BALANCE SHEETS
DECEMBER 31, JUNE 30,
ASSETS 1996 1997
------------ -------------
(Unaudited)
Current assets:
Cash $33,989 $109,248
Accounts receivable-trade 81,917 65,229
Prepaid income tax 2,500 1,696
Investment 4,688 5,364
Inventories, lower of cost or market 674,337 655,352
---------- ----------
Total current assets 797,431 836,889
Fixed assets:
Office Equipment 36,001 36,001
Accumulated depreciation (36,001) (36,001)
---------- ----------
Total net fixed assets 0 0
---------- ----------
TOTAL ASSETS $797,431 $836,889
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable-trade $90,549 $89,471
Accrued expenses 27,532 0
---------- ----------
Total liabilities 118,081 89,471
Shareholders' equity
Capital stock 68,238 68,238
Treasury stock (1,212) (1,212)
Retained earnings 612,324 680,392
---------- ----------
Total shareholders' equity 679,350 747,418
---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $797,431 $836,889
---------- ----------
---------- ----------
See accompanying notes.
12
<PAGE>
DOWNEY DRUG, INC.
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED JUNE 30,
DECEMBER 31, ----------------------------
1996 1996 1997
------------- ------------ ------------
(Unaudited)
<S> <C> <C> <C>
Net sales $3,190,686 $1,533,460 $1,423,833
Cost of sales 2,509,529 1,150,095 1,062,422
----------- ----------- -----------
Gross profit 681,157 383,365 361,411
----------- ----------- -----------
Operating expenses:
Selling, general and administrative 690,447 318,866 296,190
Depreciation 0 0 0
----------- ----------- -----------
Total operating expenses 690,447 318,866 296,190
Income(loss) from operations (9,290) 64,499 65,221
Other income (expense):
Other income 4,815 3,006 2,847
Interest expense (5,245) (2,771) 0
----------- ----------- -----------
Total other income (expense) (430) 235 2,847
----------- ----------- -----------
Net income(loss) ($9,720) $64,734 $68,068
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
See accompanying notes.
13
<PAGE>
DOWNEY DRUG, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
SIX MONTHS ENDED
YEAR ENDED JUNE 30,
DECEMBER 31, ----------------------------
1996 1996 1997
------------- ------------ ------------
(Unaudited)
Balance, Beginning of period $622,044 $622,044 $612,324
Net income (9,720) 64,734 68,068
---------- ---------- ----------
Balance, End of Period $612,324 $686,778 $680,392
---------- ---------- ----------
---------- ---------- ----------
See accompanying notes.
14
<PAGE>
DOWNEY DRUG, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30,
----------------------------
1996 1996 1997
------------ ------------ -----------
(Unaudited)
<S> <C> <C> <C>
Operating activities:
Net income ($9,720) $64,734 $68,068
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 0 0 0
Change in operating assets and liabilities:
Accounts receivable-trade 2,258 10,260 16,688
Inventories 61,926 (100,902) 18,985
Prepaid income tax (2,500) 0 804
Accounts payable-trade 7,472 27,626 (1,078)
Payroll taxes payable (4,449) 0 0
Accrued expenses 25,910 (2,245) (27,532)
---------- ---------- ----------
Net cash provided (used) by operating activities 80,897 (527) 75,935
Investing activities:
Purchase of stock (4,688) (3,985) (676)
Financing activities:
Borrowings on notes payable 78,008 78,008 0
Principal payments on notes payable (106,008) (23,000) 0
---------- ---------- ----------
Net cash (used) provided by financing activities (28,000) 55,008 0
Net increase in cash 48,209 50,496 75,259
Cash at beginning of period (14,220) (14,220) 33,989
---------- ---------- ----------
Cash at end of period $33,989 $36,276 $109,248
---------- ---------- ----------
---------- ---------- ----------
Supplemental disclosure of interest paid $5,245 $2,771 $0
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
See accompanying notes.
15
<PAGE>
DOWNEY DRUG, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. Summary of significant accounting policies
Organization
DOWNEY DRUG, INC., A Montana corporation (the "Company"), owns and operates a
retail pharmacy in Butte, Montana.
Basis of accounting
The accompanying financial statements are prepared on the accrual basis of
accounting and accordingly reflect revenues at the time products are sold or
services rendered. Expenses are recognized when the products are received or
the services are performed.
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 amounts reported in the financial statements and accompanying notes.
Actual results may differ from those estimates, and such differences may be
material to the financial statements.
Depreciation
Depreciation of equipment is provided on a straight-line basis over the
estimated useful lives of the assets.
Unaudited financial statements
The accompanying unaudited financial statements include all adjustments,
consisting of normal, recurring accruals, which the Company considers necessary
for a fair presentation of the financial position and the results of operations
for the indicated periods.
2. Leases
The Company leases the retail store facilities on a month to month basis to a
related party. Rent expense for 1996 was $72,000.
3. Subsequent events
On August 16, 1997 the Company sold a majority of its assets to HORIZON
Pharmacies, Inc. and ceased operations.
16
<PAGE>
PRO FORMA COMBINED FINANCIAL DATA
The following unaudited Pro Forma Combined Condensed Statements of Income
for the year ended December 31, 1996 and the six months ended June 30, 1997
reflect the historical results of operations of the Company, adjusted to give
effect to the acquisitions of the Mesquite, Texas store (the "Mesquite
Store") and the Butte, Montana store (the "Butte Store") in August 1997 as
though such stores were acquired January 1, 1996. The Pro Forma Combined
Condensed Balance Sheet as of June 30, 1997 reflects the historical financial
position of the Company as of that date, adjusted to give pro forma effect to
the acquisitions of the Mesquite Store and Butte Store as if they had occured
as of June 30, 1997.
The pro forma adjustments are based upon available information and
assumptions that management of the Company believes are reasonable and fairly
reflect all expenses associated with the acquired businesses. The Pro Forma
Combined Financial Data do not purport to represent the financial position or
results of operations which would have occurred had such transactions been
consummated on the dates indicated or the Company's financial position or
results of operations for any future date or period. These Pro Forma Combined
Condensed Financial Statements and notes thereto should be read in conjunction
with the historical financial statements and notes of the Company and the
financial statements of the Mesquite Store and Butte Store.
17
<PAGE>
HORIZON PHARMACIES, INC.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
JUNE 30, 1997
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
Company Mesquite Butte
Historical Store (Note A) Store (Note B) Pro Forma
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Current assets:
Cash $ 229 $ 229
Accounts receivable 2,463 $ 12 $ 47 2,522
Inventories 3,893 173 588 4,654
Prepaid expenses 41 41
-------------------------------------------------------------------------
Total current assets 6,626 185 635 7,446
Deferred offering costs 345 345
Property and equipment, net 813 20 20 853
Intangibles, net 1,308 100 110 1,518
-------------------------------------------------------------------------
Total assets $ 9,092 $ 305 $ 765 $10,162
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank overdraft $ 206 $ 150 $ 150 $ 506
Accounts payable 2,918 2,918
Accrued liabilities 257 257
Notes payable 2,105 2,105
Current portion of long-term obligations 397 21 84 502
-------------------------------------------------------------------------
Total current liabilities 5,883 171 234 6,288
Long-term obligations 1,291 134 531 1,956
Shareholders' equity:
Common stock 11 11
Additional paid-in capital 1,760 1,760
Retained earnings 147 147
-------------------------------------------------------------------------
Total shareholders' equity 1,918 1,918
-------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 9,092 $ 305 $ 765 $10,162
-------------------------------------------------------------------------
-------------------------------------------------------------------------
</TABLE>
- -------------------------
Note A: The Mesquite Store was acquired in August 1997 for a total
consideration of $305 (financed by a note payable of $155 and
cash of $150) and is included herein at the values allocated to
assets acquired.
Note B: The Butte Store was acquired in August 1997 for a total
consideration of $765 (financed by notes payable of $615 and
cash of $150) and is included herein at the values allocated to
assets acquired.
18
<PAGE>
HORIZON PHARMACIES, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
SIX MONTHS ENDING JUNE 30, 1997
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
Historical
----------------------------------------------------
Mesquite Butte Pro Forma
Company Store Store Adjustment Pro Forma
---------------------------------------------------------------- ------------
<S> <C> <C> <C> <C> <C>
Net sales $ 11,060 $ 642 $ 1,424 $ 13,126
Cost and expenses:
Cost of sales 7,583 462 1,063 9,108
Depreciation and amortization 125 2 0 $ (2)(1) 140
15 (1)
Selling, general and administrative 2,890 165 293 (12)(3) 3,322
(2)(4)
(12)(5)
---------------------------------------------------------------- -----------
Total costs and expenses 10,598 629 1,356 (13) 12,570
---------------------------------------------------------------- -----------
Income from operations 462 13 68 13 556
Interest expense and other, net 144 0 0 29 (2) 173
---------------------------------------------------------------------------------
Income before income taxes 318 13 68 (16) 383
Pro forma provision for income taxes 111 5 24 (6)(6) 134
---------------------------------------------------------------- -----------
Pro forma net income $ 207 $ 8 $ 44 $(10) $ 249
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Pro forma net income per share $ 0.22
-----------
-----------
Shares used in computation 1,142,424
-----------
-----------
</TABLE>
19
<PAGE>
HORIZON PHARMACIES, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
Historical
----------------------------------------------------
Mesquite Butte Pro Forma
Company Store Store Adjustment Pro Forma
---------------------------------------------------------------- ------------
<S> <C> <C> <C> <C> <C>
Net sales $ 13,136 $ 1,398 $ 3,191 $ 17,725
Cost and expenses:
Cost of sales 8,942 1,025 2,510 12,477
Depreciation and amortization 172 3 0 $ (3)(1) 202
30 (1)
Selling, general and administrative 3,471 357 686 (17)(3) 4,439
(34)(4)
(24)(5)
---------------------------------------------------------------- ------------
Total costs and expenses 12,585 1,385 3,196 (48) 17,118
---------------------------------------------------------------- ------------
Income (loss) from operations 551 13 (5) 48 607
Interest expense and other, net 249 0 5 (5)(2) 307
58 (2)
---------------------------------------------------------------- ------------
Income (loss) before income taxes 302 13 (10) (5) 300
Pro forma provision for income taxes 106 5 (4) (2)(6) 105
---------------------------------------------------------------- ------------
Pro forma net income (loss) $ 196 $ 8 $ (6) $ (3) $ 195
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Pro forma net income per share $ 0.18
------------
------------
Shares used in computation 1,074,246
------------
------------
</TABLE>
20
<PAGE>
ADJUSTMENTS TO PRO FORMA FINANCIAL STATEMENTS (ROUNDED)
(1) Adjust depreciation and amortization of acquired equipment and
intangibles to reflect new basis in the acquired stores:
<TABLE>
<CAPTION>
<S> <C>
Eliminate historical depreciation of Mesquite and Butte stores:
Year ended December 31, 1996 $3,000
Six months ended June 30, 1997 2,000
Provide depreciation and amortization on acquired bases in equipment
and intangibles:
Equipment - 7 year life - purchase price allocated:
Mesquite store 20,000
Butte store 20,000
Intangibles - 5 to 20 year life - purchase price allocated:
Mesquite store 100,000
Butte store 110,000
Year ended December 31, 1996:
Depreciation of equipment:
Mesquite store 3,000
Butte store 3,000
Amortization of intangibles:
Mesquite store 13,000
Butte store 11,000
--------
Total 30,000
Six months ended June 30, 1997:
Depreciation of equipment:
Mesquite store 1,000
Butte store 1,000
Amortization of intangibles:
Mesquite store 7,000
Butte store 6,000
--------
Total 15,000
(2) Adjust interest expense:
Eliminate historical interest expense of Mesquite and Butte stores:
Year ended December 31, 1996 5,000
Six months ended June 30, 1997 0
Provide for interest expense on debt issued in acquisitions:
Debt:
Mesquite store 155,000
Butte store 615,000
Interest Rate:
Mesquite store 8.50%
Butte store 8.00%
Year ended December 31, 1996:
Mesquite store 12,000
Butte store 46,000
--------
Total 58,000
Six months ended June 30, 1997:
Mesquite store 6,000
Butte store 23,000
--------
Total 29,000
21
<PAGE>
(3) Reduce Officer Salary to the new manager contract with Horizon:
Year ended December 31, 1996:
Mesquite store 9,000
Butte store 8,000
--------
Total 17,000
Six months ended June 30, 1997:
Mesquite store 2,000
Butte store 10,000
--------
Total 12,000
(4) Eliminate historical pension plan expense of Butte store:
Year ended December 31, 1996: 34,000
Six months ended June 30, 1997: 2,000
(5) Reduce rent expense to the new lease agreement for the Butte store with Horizon:
Year ended December 31, 1996: 24,000
Six months ended June 30, 1997: 12,000
(6) Adjust pro forma income taxes (at a rate of 35%) for acquistion adjustments:
Year ended December 31, 1996: 2,000
Six months ended June 30, 1997: 6,000
</TABLE>
22
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
EXHIBIT NO. NAME OF EXHIBIT
---------- ---------------
23.1 Consent of Howard & Waltrip, P.C., Independent Auditors
(filed electronically herewith).
23.2 Consent of Howard & Waltrip, P.C., Independent
Auditors (filed electronically herewith).
(b) Reports on Form 8-K
The Company was not required to file and did not file any report on Form
8-K during the three months ended June 30, 1997.
23
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Company caused
the report to be signed on its behalf by the undersigned, thereunto duly
authorized.
HORIZON PHARMACIES, INC.,
a Texas corporation
Date: October 24, 1997 /s/ RICKY D. MCCORD
----------------------------------
Ricky D. McCord
Chief Executive Officer
Date: October 24, 1997 /s/ DAVID W. FRAUHIGER
----------------------------------
David W. Frauhiger
Chief Financial Officer
24
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
We consent to the use of our report on the financial statements for the year
ended December 31, 1996 of Revco Inc. dba Northridge Pharmacy, dated October
19, 1997 in the Form 10QSB/A of HORIZON Pharmacies, Inc.
Herold, Howard & Madsen, P.C.
Certified Public Accountants
Dallas, Texas
October 23, 1997
<PAGE>
Exhibit 23.2
Consent of Independent Auditors
We consent to the use of our report on the financial statements for the year
ended December 31, 1996 of Downey Drug, Inc., dated October 19, 1997 in the
Form 10QSB/A of HORIZON Pharmacies, Inc.
Herold, Howard & Madsen, P.C.
Certified Public Accountants
Dallas, Texas
October 23, 1997
