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<PAGE>
- ------------------------------------------------------------------------------
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): JUNE 2, 1999
---------------
HORIZON PHARMACIES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 000-22403 75-2441557
(State or other (Commission File (I.R.S. Employer
jurisdiction of incorporation) Number) Identification
Number)
531 W. MAIN STREET 75020
SUITE 100 (ZIP CODE)
DENISON, TEXAS
(Address of
principal
executive offices)
Registrant's telephone number, including area code: (903) 465-2397
NOT APPLICABLE
(Former name or former address, if changed since last report)
- ------------------------------------------------------------------------------
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Filed herewith as a part of this report are the following financial
statements for Fulton Drugs, Inc.: (i) audited Balance Sheet at December 31,
1998 and audited Statement of Income, Statement of Shareholders' Equity and
Statement of Cash Flows for the year ended December 31, 1998, and the report
of Howard & Waltrip, P.C., certified public accountants, thereon, together
with the notes thereto; and (ii) unaudited Balance Sheet at March 31, 1999,
and unaudited Statements of Income, unaudited Statements of Shareholders'
Equity, and unaudited Statements of Cash Flows each for the three months
ended March 31, 1999 and March 31, 1998. These financial statements are
being filed in accordance with and within the time provided for in Item
7(a)(4).
PRO FORMA FINANCIAL INFORMATION.
Filed herewith as a part of this report are HORIZON Pharmacies, Inc.'s Pro
Forma Combined Condensed Balance Sheet at March 31, 1999 and Pro Forma
Combined Condensed Statement of Income for the three months ending
March 31, 1999 and the year ended December 31, 1998, 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.
2 -- Purchase Agreement, dated June 2, 1999, by and
between HORIZON Pharmacies, Inc. and Fulton Drugs,
Inc. (previously filed as Exhibit 2.1 to HORIZON's
Current Report on Form 8-K, filed on July 9, 1999).
2
<PAGE>
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.
HORIZON PHARMACIES, INC.
By: /s/ John N. Stogner
---------------------------
John N. Stogner
Chief Financial Officer
Date: August 16, 1999
3
<PAGE>
FULTON DRUGS, INC.
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
WITH REPORT OF INDEPENDENT AUDITORS
F-1
<PAGE>
The Board of Directors and Shareholders July 22, 1999
Fulton Drugs, Inc.
REPORT OF INDEPENDENT AUDITORS
We have audited the accompanying balance sheet of Fulton Drugs, Inc. as of
December 31, 1998, 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 Fulton Drugs, Inc. at December
31, 1998, 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
F-2
<PAGE>
FULTON DRUGS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1998 1999
------------ -----------
<S> <C> <C>
ASSETS (Unaudited)
Current assets
Cash $ 494,790 $ 371,089
Accounts receivable-trade 221,698 240,349
Inventories, lower of cost or market 264,344 281,660
----------- ----------
Total current assets 980,832 893,098
Fixed assets
Equipment 58,705 58,705
Vehicles 21,788 21,788
Leasehold Improvements 51,314 51,314
Accumulated depreciation (84,727) (85,549)
----------- ----------
Total net fixed assets 47,080 46,258
TOTAL ASSETS $ 1,027,912 $ 939,356
----------- ----------
----------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable-trade $ 203,772 $ 129,086
Accrued expenses 91,749 23,524
----------- ----------
Total current liabilities 295,521 152,610
Shareholders' equity
Common stock 30,600 30,600
Treasury stock (104,128) (104,128)
Retained earnings 805,919 860,274
----------- ----------
Total shareholders' equity 732,391 786,746
----------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 1,027,912 $ 939,356
----------- ----------
----------- ----------
</TABLE>
See accompanying notes.
F-3
<PAGE>
FULTON DRUGS, INC.
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, ---------------------------------
1998 1998 1999
----------- ----------- -----------
<S> <C> <C> <C>
(Unaudited)
Net sales $ 5,497,760 $ 1,293,348 $ 1,373,690
Cost of sales 3,943,702 905,344 1,008,724
----------- ----------- -----------
Gross profit 1,554,058 388,004 364,966
----------- ----------- -----------
Operating expenses:
Selling, general and administrative 1,132,112 217,773 239,408
Depreciation 7,648 684 822
----------- ----------- -----------
Total operating expenses 1,139,760 218,457 240,230
Income from operations 414,298 169,547 124,736
Other income (expense):
Other income (expense) (5,948) (50) (2,001)
Interest income 15,556 3,417 2,822
Interest expense (15,668) (3,023) (3,022)
----------- ----------- -----------
Total other income (expense) (6,060) 344 (2,201)
----------- ----------- -----------
Net income $ 408,238 $ 169,891 $ 122,535
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
See accompanying notes
F-4
<PAGE>
FULTON DRUGS, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, ---------------------------------
1998 1998 1999
----------- ----------- -----------
<S> <C> <C> <C>
(Unaudited)
Balance, Beginning of period $ 685,483 $ 685,483 $ 805,919
Distributions (287,802) (109,500) (68,180)
Net income 408,238 169,891 122,535
----------- ----------- -----------
Balance, End of Period $ 805,919 $ 745,874 $ 860,274
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
See accompanying notes.
F-5
<PAGE>
FULTON DRUGS, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, ---------------------------------
1998 1998 1999
----------- ----------- -----------
<S> <C> <C> <C>
(Unaudited)
Operating activities:
Net income $ 408,238 $ 169,891 $ 122,535
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 7,648 684 822
Change in operating assets and liabilities:
Accounts receivable-trade (42,131) 11,318 (18,651)
Inventories (35,990) 53,016 (17,316)
Accounts payable-trade (94,732) (175,360) (74,686)
Accrued expenses 13,103 (11,823) (68,225)
----------- ----------- -----------
Net cash provided (used) by operating activities 256,136 47,726 (55,521)
Financing activities:
Distributions (287,802) (109,500) (68,180)
----------- ----------- -----------
Net increase (decrease) in cash (31,666) (61,774) (123,701)
Cash at beginning of period 526,456 526,456 494,790
----------- ----------- -----------
Cash at end of period $ 494,790 $ 464,682 $ 371,089
----------- ----------- -----------
----------- ----------- -----------
Supplemental disclosure of interest paid $ 15,668 $ 3,023 $ 3,022
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
See accompanying notes.
F-6
<PAGE>
FULTON DRUGS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. Summary of significant accounting policies
Organization
FULTON DRUGS, INC., an Ohio S-corporation (the "Company"), owns and operates a
retail pharmacy in Canton, Ohio.
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.
Concentrations of credit risk
Financial instruments which potentially subject the Company to concentrations of
credit risk consist principally of accounts receivable.
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.
Cash equivalents
Cash equivalents include money-market investments with maturities of three
months or less when purchased.
Depreciation
Depreciation of equipment is provided on a straight-line basis over the
estimated useful lives of the assets.
Income taxes
No historical provisions for income taxes were included in the Company's
financial statements as income taxes, if any, were payable by the shareholders
under provisions of subchapter S of the Internal Revenue Code.
F-7
<PAGE>
FULTON DRUGS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. Summary of significant accounting policies (continued)
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 from a related party on a
month-to-month basis. Total rent for the year ended December 31, 1998 was
$48,000.
3. Profit Sharing Plan
Effective July 1, 1991, the Company adopted a profit sharing plan for certain
full-time employees. Annual contributions to the plan are made by the company,
at their discretion. Eligible employees are allocated a portion of the
contribution based on relative compensation and become vested over time. The
total contribution for 1998 was $71,960.
4. Subsequent events
On June 2, 1999 the Company sold a majority of its assets to HORIZON Pharmacies,
Inc. and ceased operations.
F-8
<PAGE>
HORIZON PHARMACIES, INC.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
MARCH 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
Company Fulton
ASSETS Historical Drugs, Inc. Pro Forma
---------- ----------- ----------
<S> <C> <C> <C>
Current assets:
Cash $ 6,517 ($ 1,000) $ 5,517
Accounts receivable 5,805 72 5,877
Inventories 11,504 277 11,781
Other 302 302
-------- -------- --------
Total current assets 24,128 (651) 23,477
Property and equipment, net 2,731 40 2,771
Intangibles, net 5,036 3,000 8,036
-------- -------- --------
Total assets $ 31,895 $ 2,389 $ 34,284
-------- -------- --------
-------- -------- --------
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 $ 216 1,270
-------- -------- --------
Total currrent liabilities 6,031 216 6,247
Long-term obligations 5,345 1,173 6,518
Deferred income taxes 157 157
Shareholder's equity:
Common stock 54 54
Additional paid-in capital 19,608 1,000 20,608
Retained earnings 770 770
Treasury stock (70) (70)
-------- -------- --------
Total shareholders' equity 20,362 1,000 21,362
-------- -------- --------
Total liabilities and shareholders' equity $ 31,895 $ 2,389 $ 34,284
-------- -------- --------
-------- -------- --------
</TABLE>
Note: The Canton, Ohio Store was acquired in June 1999 for a total
consideration of $3,389 financed by a note payable of $1,389, stock of
$1,000 and cash of $1,000 and is included herein at the values allocated
to assets acquired.
F-9
<PAGE>
HORIZON PHARMACIES, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
THREE MONTHS ENDED MARCH 31, 1999
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
Historical
--------------------------
Fulton Pro Forma
Company Drugs, Inc. Adjustments Pro Forma
------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net revenues $30,985 $ 1,374 $ 32,359
Cost and expenses:
Cost of sales and services 21,915 1,009 22,924
Depreciation and amortization 339 1 $ (1) (1) 364
25 (1)
Selling, general and administrative 8,017 239 (18) (3) 8,239
1 (4)
------- -------- ------- -----------
Total costs and expenses 30,271 1,249 7 31,527
------- -------- ------- -----------
Income from operations 714 125 (7) 832
Interest expense and other, net 327 2 (3) (2) 352
26 (2)
------- -------- ------- -----------
Income before income taxes 387 123 (30) 480
Provision for income taxes 0 0
------- -------- ------- -----------
Net income $ 387 $ 123 $ (30) $ 480
------- -------- ------- -----------
------- -------- ------- -----------
Basic earnings per share $ 0.08
-----------
-----------
Shares used in computation of basic earnings per share 5,802,417
-----------
-----------
Diluted earnings per share $ 0.08
-----------
-----------
Shares used in computation of diluted earnings per share 6,044,856
-----------
-----------
</TABLE>
F-10
<PAGE>
HORIZON PHARMACIES, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1998
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
Historical
--------------------------
Fulton Pro Forma
Company Drugs, Inc. Adjustments Pro Forma
------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net revenues $74,737 $ 5,498 $ 80,235
Cost and expenses:
Cost of sales and services 54,511 3,944 58,455
Depreciation and amortization 867 8 $ (8) (1) 966
99 (1)
Selling, general and administrative 21,292 1,132 (70) (3) 22,359
5 (4)
------- -------- ------- -----------
Total costs and expenses 76,670 5,084 26 81,780
------- -------- ------- -----------
Income from operations (1,933) 414 (26) (1,545)
Interest expense and other, net 606 6 (16) (2) 699
103 (2)
------- -------- ------- -----------
Income before income taxes (2,539) 408 (113) (2,244)
Provision for income taxes (360) (360)
------- -------- ------- -----------
Net income ($2,179) $ 408 $ (113) $ (1,884)
------- -------- ------- -----------
------- -------- ------- -----------
Basic earnings per share $ (0.65)
-----------
-----------
Shares used in computation of basic earnings per share 2,913,628
-----------
-----------
Diluted earnings per share $ (0.63)
-----------
-----------
Shares used in computation of diluted earnings per share 3,009,196
-----------
-----------
</TABLE>
F-11
<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, 1998: 8
Three months ended March 31, 1999: 1
Provide depreciation and amortization on acquired bases in equipment and
intangibles:
Equipment - 7 year life - purchase price allocated 40
Intangibles - 6 to 40 year life - purchase price allocated 3,000
Twelve months ended December 31, 1998:
Depreciation of equipment 6
Amortization of intangibles 93
Total 99
Three months ended March 31, 1999:
Depreciation of equipment 2
Amortization of intangibles 23
Total 25
(2) Adjust interest expense:
Eliminate historical interest expense
Twelve months ended December 31, 1998: 16
Three months ended March 31, 1999: 3
Provide for interest expense on debt issued in acquisition:
Debt 1,000
Interest rate 8.00%
Twelve months ended December 31, 1998: 103
Three months ended March 31, 1999: 26
(3) Decrease previous Officer Salary to new contract with Horizon:
Twelve months ended December 31, 1998: 70
Three months ended March 31, 1999: 18
(4) Increase previous office rent to new contract with Horizon:
Twelve months ended December 31, 1998: 5
Three months ended March 31, 1999: 1
</TABLE>
F-12
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