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Previous: NATIONAL EQUITY TRUST S&P 500 STRATEGY TRUST SERIES 2, 487, 1998-10-14 |
Next: WNC HOUSING TAX CREDIT FUND VI LP SERIES 5, 8-K/A, 1998-10-14 |
<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): July 31, 1998
HORIZON PHARMACIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-22403 75-2441557
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
275 W. PRINCETON DRIVE
PRINCETON, TEXAS 75407
(Address of Principal Executive Offices) (Zip Code)
(972) 736-2424
(Registrant's telephone number, including area code)
- -------------------------------------------------------------------------------
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
Filed herewith as a part of this report are the following financial
statements for CCB Consulting, Inc., a Nebraska corporation: (i) audited
Balance Sheet at December 31, 1997 and audited Statement of Income,
Statement of Shareholders' Equity and Statement of Cash Flows for the year
ended December 31, 1997, and the report of Howard & Waltrip, P.C., certified
public accountants, thereon, together with the notes thereto; and (ii)
unaudited Balance Sheet at June 30, 1998, and unaudited Statements of Income,
unaudited Statements of Shareholders' Equity, and unaudited Statements of
Cash Flows each for the six months ended June 30, 1998 and June 30, 1997.
These financial statements are being filed in accordance with and within the
time provided for in Item 7(a)(4).
(b) PRO FORMA FINANCIAL INFORMATION.
Filed herewith as a part of this report are HORIZON Pharmacies, Inc.'s
(the "Registrant") Pro Forma Combined Condensed Balance Sheet at June 30,
1998 and Pro Forma Combined Condensed Statement of Income for the six months
ending June 30, 1998 and the year ended December 31, 1997, and the
Adjustments to Pro Forma Financial Statements applicable thereto. These pro
forma financial statements are being filed in accordance with and within the
time provided for in Item 7(a)(4).
(c) EXHIBITS.
The following exhibits are filed with this report:
<TABLE>
<CAPTION>
Exhibit No. Name of Exhibit
- ----------- ----------------
<S> <C>
23 Consent of Howard & Waltrip, P.C., Independent Auditors
(filed electronically herewith).
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
REGISTRANT:
HORIZON PHARMACIES, INC.
Date: October 12, 1998 By: /s/ Ricky D. McCord
--------------------------------
Ricky D. McCord, President
<PAGE>
CCB CONSULTING, INC.
YEAR ENDED DECEMBER 31, 1997
WITH REPORT OF INDEPENDENT AUDITORS
<PAGE>
[Letterhead of Howard & Waltrip, P.C.]
The Board of Directors and Shareholders September 30, 1998
CCB Consulting, Inc.
REPORT OF INDEPENDENT AUDITORS
We have audited the accompanying balance sheet of CCB Consulting, Inc. as of
December 31, 1997, and the related statements 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 CCB Consulting, Inc. at
December 31, 1997, 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
<PAGE>
CCB CONSULTING, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
ASSETS 1997 1998
- ------ ------------ --------
(Unaudited)
<S> <C> <C>
Current assets:
Cash $ 17,030 $ 51,649
Accounts receivable-trade 286,396 235,926
Prepaid insurance 1,486 0
Deposit 425 425
Inventories, lower of cost or market 112,720 133,969
--------- ---------
Total current assets 418,057 421,969
Fixed assets:
Land 10,000 10,000
Building 115,587 115,587
Equipment 211,778 211,778
Accumulated depreciation (186,991) (199,448)
--------- ---------
Total net fixed assets 150,374 137,917
--------- ---------
TOTAL ASSETS $ 568,431 $ 559,886
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities
Accounts payable-trade $ 44,404 $ 23,530
Accrued expenses 13,255 21,802
Current portion of long term debt 29,000 29,000
--------- ---------
Total current liabilities 86,659 74,332
Long term liabilities
Long term debt 60,851 46,572
Less current portion of long term debt (29,000) (29,000)
--------- ---------
Total long term liabilities 31,851 17,572
Shareholders' equity
Capital stock 1,000 1,000
Paid in capital 173,768 173,768
Retained earnings 275,153 293,214
--------- ---------
Total shareholders' equity 449,921 467,982
--------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 568,431 $ 559,886
--------- ---------
--------- ---------
</TABLE>
See accompanying notes.
<PAGE>
CCB CONSULTING, INC.
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED JUNE 30,
DECEMBER 31, -----------------------
1997 1997 1998
------------ -------- --------
(Unaudited)
<S> <C> <C> <C>
Net sales $1,568,894 $712,586 $852,507
Cost of sales 894,069 433,249 530,215
---------- -------- --------
Gross profit 674,825 279,337 322,292
---------- -------- --------
Operating expenses:
Selling, general and administrative 405,995 183,334 211,025
Depreciation 26,907 13,454 12,457
---------- -------- --------
Total operating expenses 432,902 196,788 223,482
Income from operations 241,923 82,549 98,810
Other income (expense):
Other income(expense) (1,100) 6,918 12,638
Interest expense (7,480) (4,577) (2,516)
---------- -------- --------
Total other income (expense) (8,580) 2,341 10,122
---------- -------- --------
Net income $ 233,343 $ 84,890 $108,932
---------- -------- --------
---------- -------- --------
</TABLE>
See accompanying notes.
<PAGE>
CCB CONSULTING, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED JUNE 30,
DECEMBER 31, -----------------------
1997 1997 1998
------------ -------- --------
(Unaudited)
<S> <C> <C> <C>
Balance, Beginning of period $ 156,534 $156,534 $275,153
Distributions - Shareholder (114,724) (57,362) (90,871)
Net income 233,343 84,890 108,932
--------- -------- --------
Balance, End of Period $ 275,153 $184,062 $293,214
--------- -------- --------
--------- -------- --------
</TABLE>
See accompanying notes.
<PAGE>
CCB CONSULTING, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED JUNE 30,
DECEMBER 31, -----------------------
1997 1997 1998
------------ -------- --------
(Unaudited)
<S> <C> <C> <C>
Operating activities:
Net income $ 233,343 $ 84,890 $108,932
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 26,907 13,454 12,457
Change in operating assets and liabilities:
Accounts receivable-trade (134,333) (26,563) 50,469
Inventories 2,533 (5,674) (21,247)
Prepaid insurance (1,486) 0 1,486
Accounts payable-trade 29,007 10,677 (20,874)
Accrued expenses (23,993) 10,977 8,547
--------- -------- --------
Net cash provided by operating activities 131,978 87,761 139,770
Financing activities:
Distributions to shareholders (114,724) (57,362) (90,871)
Principal payments on notes payable (29,359) (15,768) (14,280)
--------- -------- --------
Net cash used by financing activities (144,083) (73,130) (105,151)
Net increase (decrease) in cash (12,105) 14,631 34,619
Cash at beginning of period 29,135 29,135 17,030
--------- -------- --------
Cash at end of period $ 17,030 $ 43,766 $ 51,649
--------- -------- --------
--------- -------- --------
Supplemental disclosure of interest paid $ 7,480 $ 4,577 $ 2,516
--------- -------- --------
--------- -------- --------
</TABLE>
See accompanying notes.
<PAGE>
CCB CONSULTING, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. Summary of significant accounting policies
Organization
CCB CONSULTING, INC., a Nebraska corporation (the "Company"), owns and operates
a retail pharmacy in Blair, Nebraska.
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.
<PAGE>
CCB CONSULTING, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
2. Long term liabilities
<TABLE>
<S> <C>
Installment notes totaling approximately $ 60,851
$3,000 per month. Notes were paid
off at the time of purchase by HORIZON
Pharmacies, Inc. See note 4.
Less current portion of long term debt (29,000)
--------
Total long term liabilities $ 31,851
--------
--------
</TABLE>
3. Income taxes
The Company, with the consent of its shareholders, has elected to have its
income taxed under Section 1372 of the Internal Revenue Code, which provides
that, in lieu of corporation income taxes, the shareholders are taxed on
their proportionate share of the Company's taxable income. Therefore, no
provisions or liability for federal income taxes is reflected in these
statements.
4. Subsequent events
On July 31, 1998 the Company sold a majority of its assets to HORIZON
Pharmacies, Inc. and ceased operations.
<PAGE>
HORIZON PHARMACIES, INC.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
JUNE 30, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
Company
ASSETS Historical Blair (Note) Pro Forma
---------- ------------ ---------
<S> <C> <C> <C>
Current assets:
Cash $ 6,517 ($300) $ 6,217
Accounts receivable 5,805 5,805
Inventories 11,504 90 11,594
Other 302 302
------- ----- -------
Total current assets 24,128 (210) 23,918
Property and equipment, net 2,731 20 2,751
Intangibles, net 5,036 500 5,536
------- ----- -------
Total assets $31,895 $ 310 $32,205
------- ----- -------
------- ----- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,006 $4,006
Accrued liabilities 738 738
Notes payable 233 233
Current portion of long-term obligations 1,054 $ 130 1,184
------- ----- -------
Total current liabilities 6,031 130 6,161
Long-term obligations 5,345 5,345
Deferred income taxes 157 157
Shareholder's equity:
Common stock 54 54
Additional paid-in capital 19,608 180 19,788
Retained earnings 770 770
Treasury stock (70) (70)
------- ----- -------
Total shareholders' equity 20,362 180 20,542
------- ----- -------
Total liabilities and shareholders' equity $31,895 $ 310 $32,205
------- ----- -------
------- ----- -------
</TABLE>
Note: The Blair, Nebraska Store was acquired in July 1998 for a total
consideration of $610 financed by a note payable of $130, stock
of $180 and cash of $300 and is included herein at the values
allocated to assets acquired.
<PAGE>
HORIZON PHARMACIES, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
SIX MONTHS ENDED JUNE 30, 1998
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
Historical
---------------------- Pro Forma
Company Blair Adjustments Pro Forma
------- ----- ----------- ---------
<S> <C> <C> <C> <C>
Net revenues $28,689 $853 $ 29,542
Cost and expenses:
Cost of sales and services 19,648 530 20,178
Depreciation and amortization 330 12 ($12) (1) 341
11 (1)
Selling, general and administrative 7,744 211 (8) (3) 7,956
9 (5)
------- ---- ---- ---------
Total costs and expenses 27,722 754 0 28,476
------- ---- ---- ---------
Income from operations 967 99 0 1,066
Interest expense and other, net 153 (10) (3) (2) 156
3 (2)
13 (6)
------- ---- ---- ---------
Income before income taxes 814 109 (13) 910
Provision for income taxes 322 42 (4) 364
------- ---- ---- ---------
Net income $ 492 $109 ($55) $ 546
------- ---- ---- ---------
------- ---- ---- ---------
Basic earnings per share $ 0.12
---------
---------
Shares used in computation of basic earnings per share 4,599,547
---------
---------
Diluted earnings per share $ 0.11
---------
---------
Shares used in computation of diluted earnings per share 4,872,484
---------
---------
</TABLE>
<PAGE>
HORIZON PHARMACIES, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
Historical
--------------------- Pro Forma
Company Blair Adjustments Pro Forma
------- ------ ----------- ---------
<S> <C> <C> <C> <C>
Net revenues $28,430 $1,569 $ 29,999
Cost and expenses:
Cost of sales and services 19,132 894 20,026
Depreciation and amortization 330 27 ($27) (1) 350
20 (1)
Selling, general and administrative 7,943 406 (17) (3) 8,350
18 (5)
------- ------ ---- ---------
Total costs and expenses 27,405 1,327 (6) 28,726
------- ------ ---- ---------
Income from operations 1,025 242 6 1,273
Interest expense and other, net 218 9 (7) (2) 228
9 (2)
(1) (6)
------- ------ ---- ---------
Income before income taxes 807 233 5 1,045
Provision for income taxes 480 * 87 (4) 567
------- ------ ---- ---------
Net income $ 327 $ 233 ($82) $ 478
------- ------ ---- ---------
------- ------ ---- ---------
Basic earnings per share $ 0.17
---------
---------
Shares used in computation of basic earnings per share 2,781,918
---------
---------
Diluted earnings per share $ 0.17
---------
---------
Shares used in computation of diluted earnings per share 2,877,486
---------
---------
</TABLE>
* Includes $170 deferred income taxes resulting from change in tax status.
<PAGE>
Adjustments to Pro Forma Financial Statements
<TABLE>
<S> <C>
(1) Adjust depreciation and amortization of acquired equipment and
intangibles to reflect new basis in the acquired store:
Eliminate historical depreciation and amortization:
Twelve months ended December 31, 1997: $ 27
Six months ended June 30, 1998: 12
Provide depreciation and amortization on acquired bases in equipment
and intangibles:
Equipment - 7 year life - purchase price allocated 20
Intangibles - 6 to 40 year life - purchase price allocated 500
Twelve months ended December 31, 1997:
Depreciation of equipment 3
Amortization of intangibles 17
Total 20
Six months ended June 30, 1998:
Depreciation of equipment 2
Amortization of intangibles 9
Total 11
(2) Adjust interest expense:
Eliminate historical interest expense
Twelve months ended December 31, 1997: 7
Six months ended June 30, 1998: 3
Provide for interest expense on debt issued in acquisition:
Debt 130
Interest rate 8.50%
Twelve months ended December 31, 1997: 9
Six months ended June 30, 1998: 3
(3) Decrease previous Officer Salary to new contract with Horizon:
Twelve months ended December 31, 1997: 17
Six months ended June 30, 1998: 8
(4) Adjust pro forma taxes (at a rate of 38% for 1997 and 40% for 1998) for
acquisition adjustments and historical income:
Twelve months ended December 31, 1997: 87
Six months ended June 30, 1998: 42
(5) Adjust for rent previously not reported as the building was owned by
the corporation
Twelve months ended December 31, 1997: 18
Six months ended June 30, 1998: 9
(6) Eliminate other income/(expense) for rent and sale of assets
not to be recognized by Horizon
Twelve months ended December 31, 1997: (1)
Six months ended June 30, 1998: 13
</TABLE>
<PAGE>
Exhibit 23
Consent of Independent Auditors
We consent to the use of our report on the financial statements for the year
ended December 31, 1997 of CCB Consulting, Inc., in the Form 8-K/A dated
July 31, 1998 of HORIZON Pharmacies, Inc.
Howard & Waltrip, P.C.
Certified Public Accountants
Dallas, Texas
October 13, 1998
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