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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) May 22, 1995
HEALTHDYNE, INC.
(Exact name of registrant as specified in its charter)
Georgia 0-10647 58-1099590
- ------------------------------- ------------------------ -------------------
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation or organization Identification No.)
1850 PARKWAY PLACE, MARIETTA, GEORGIA 30067
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 404/423-4500
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
As previously reported in Current Reports on Form 8-K filed by
Healthdyne Technologies, Inc. ("Technologies") dated May 1, 1995 and May 26,
1995, the Board of Directors of Healthdyne, Inc. ("Healthdyne") approved a plan
on April 20, 1995 to distribute Healthdyne's 81 percent ownership interest in
Technologies to the shareholders of Healthdyne in a tax-free distribution (the
"Distribution"). No holder of shares of Healthdyne Common Stock were required
to pay any cash or other consideration for the shares of Technologies Common
Stock distributed or to surrender or exchange shares of Healthdyne Common Stock
in order to receive Technologies Common Stock. The Board of Directors of
Technologies previously approved a new Stock Option Plan and other arrangements
related to the Distribution and, to the extent required, those actions were
ratified on April 20, 1995 at the Technologies Annual Meeting of Shareholders.
The Healthdyne Board of Directors established May 5, 1995 as the record date
and May 22, 1995 as the date for the Distribution.
The Distribution was effected on May 22, 1995 by mailing certificates
for Technologies Common Stock to the holders of record of Healthdyne Common
Stock on May 5, 1995. The fraction of a Technologies share distributed for
each share of Common Stock of Healthdyne (0.65071) equalled 10,000,000 (the
number of shares of Technologies Common Stock owned by Healthdyne) divided by
15,367,852 shares of Healthdyne Common Stock outstanding on the record date,
rounded to the fifth decimal place. Each record holder of Healthdyne Common
Stock received the number of whole Technologies shares which was obtained when
0.65071 was multiplied by the number of shares of Healthdyne Common Stock held
by such record holder on the record date. Trust Company Bank, as Distribution
Agent, aggregated the fractional Technologies shares, which were not
distributed, into whole shares and sold them in the open market at a price of
$11.75 per whole share, on behalf of holders who would otherwise have received
such fractional shares. Such holders were mailed a cash payment for their
fractional shares on May 22, 1995.
At the time of the Distribution, there were 12,347,086 shares of Common
Stock of Technologies outstanding and 10,000,000 of those shares were held by
Healthdyne. The remaining 2,347,086 shares were held by persons other than
Healthdyne and were available for public trading. Following the Distribution,
Healthdyne does not own any shares of Technologies Common Stock and all
12,347,086 outstanding shares are available for public trading. Technologies'
Common Stock is traded on the NASDAQ National Market System.
On April 21, 1995 Healthdyne and Technologies entered into a
Distribution Agreement, which set forth their rights and obligations in
connection with the Distribution, and also executed related Tax Sharing and Tax
Indemnity Agreements, a Corporate Services Agreement, an OEM Design and
Manufacturing Agreement and a Tradename License Agreement. These agreements
were described in the proxy statement for Technologies' 1995 Annual Meeting of
Shareholders, were attached as exhibits to Technologies' Form 8-K dated May 1,
1995 and are incorporated by reference herein.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(b) Pro Forma Financial Information
HEALTHDYNE, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
The following unaudited pro forma consolidated condensed balance sheet
as of March 31, 1995 and the unaudited pro forma consolidated condensed
statements of earnings (loss) for the year ended December 31, 1994 and the
three month period ended March 31, 1995, give effect to the Company's
distribution of its 81% ownership interests in Healthdyne Technologies, Inc. to
the Company's common shareholders. For purposes of the pro forma consolidated
condensed balance sheet, the information is presented as if the distribution
had occurred on March 31, 1995. For purposes of the pro forma consolidated
statements of earnings (loss), the information is presented as if the
distribution had occurred on January 1, 1994. These tables present historical
financial information of Healthdyne, Inc. in the first column, the deletion of
Healthdyne Technologies, Inc. in the second column, pro forma adjustments in
the third column, and pro forma financial information of the remaining
Healthdyne, Inc. business in the fourth column.
The Pro Forma Financial Information does not purport to represent what
Healthdyne's financial position or results of operations would actually have
been had such transaction actually occurred on January 1, 1994 or March 31,
1995, and should be read in conjunction with the separate audited and unaudited
consolidated financial statements and notes thereto of Healthdyne, which were
included in Healthdyne's Annual Report on Form 10-K for the year ended December
31, 1994 and its Quarterly Report on Form 10-Q for the three months ended March
31, 1995, and the notes to the following pro forma financial statements.
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HEALTHDYNE, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
MARCH 31, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
March 31, 1995
----------------------------------------------------------------------
Historical Healthdyne Pro Forma
ASSETS Healthdyne, Inc. Technologies, Inc. Adjustments Pro Forma
- ------ ---------------- ------------------ ----------- ---------
<S> <C> <C> <C> <C>
Current Assets:
Cash and short-term investments $ 42,383 2,258 0 40,125
Trade accounts receivable, net 40,679 27,339 0 13,340
Inventories 16,605 15,917 0 688
Deferred income taxes 1,599 1,888 1,888(A) 1,599
Prepaid expenses and other current assets 4,949 1,045 682(B) 6,336
1,750(C)
------------------------------------------------------------------
Total current assets 106,215 48,447 4,320 62,088
Property and equipment, net 18,770 6,327 0 12,443
Goodwill and other intangibles, net 25,527 17,555 0 7,972
Other assets 9,437 1,714 1,750(C) 9,473
------------------------------------------------------------------
$159,949 74,043 6,070 91,976
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LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Current installments of long-term debt
and obligations under capital leases $ 1,129 400 0 729
Accounts payable, principally trade 10,353 8,423 0 1,930
Other current liabilities 17,168 7,818 1,888(A) 11,920
682(B)
------------------------------------------------------------------
Total current liabilities 28,650 16,641 2,570 14,579
Long-term debt and obligations under capital
leases, excluding current installments 26,438 22,800 0 3,638
Deferred income taxes 4,070 0 0 4,070
Other long-term liabilities 69 0 69
------------------------------------------------------------------
Total liabilities 59,227 39,441 2,570 22,356
Minority interest 6,517 5,909 0 608
Redeemable preferred stock 0 3,500 3,500(C) 0
Shareholders' equity:
Common stock 153 0 0 153
Additional paid-in capital 111,338 25,193 0 86,145
Accumulated deficit (17,286) 0 0 (17,286)
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Total shareholders' equity 94,205 25,193 0 69,012
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$159,949 74,043 6,070 91,976
==================================================================
</TABLE>
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HEALTHDYNE, INC.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (LOSS)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Year Ended December 31, 1994
------------------------------------------------------------
Historical Healthdyne
Healthdyne, Technologies Pro Forma
Inc. Inc. Adjustments Pro Forma
------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $152,422 89,012 3,377 (D) 66,787
Cost of revenues 80,653 55,441 2,535 (D) 27,747
-------- ------- ------ -------
Gross profit 71,769 33,571 842 39,040
Selling and administrative expenses 58,762 20,551 0 38,211
Provision for doubtful accounts 5,835 460 0 5,375
Research and development expenses 4,602 3,848 0 754
-------- ------- ------ -------
Operating profit (loss) 2,570 8,712 842 (5,300)
Interest income 1,485 305 298 (E) 1,478
Interest expense (1,230) (634) 0 (596)
Other income (expense), net 28 105 0 (77)
Minority interest (655) 0 0 (655)
-------- ------- ------ -------
Earnings (loss) before income tax
expense and minority interest
in net earnings of subsidiaries 2,198 8,488 1,140 (5,150)
Income tax expense 562 3,383 2,821 (F) 0
-------- ------- ------ -------
Earnings (loss) before minority interest
in net earnings of subsidiaries 1,636 5,105 (1,681) (5,150)
-------- ------- ------ -------
Minority interest in net earnings
of subsidiary 970 0 (970)(G) 0
-------- ------- ------ -------
Earnings (loss) from continuing operations $ 666 5,105 (711) (5,150)
======== ======= ====== =======
Net earnings (loss) per common share and
common share equivalent from continuing
operations $ 0.04 $ (0.34)
======== =======
Weighted average number of common
shares and common share equivalents 15,335 15,335
======== =======
<CAPTION>
Three Months Ended March 31, 1995
-----------------------------------------------------------
Historical Healthdyne
Healthdyne Technologies Pro Forma
Inc. Inc. Adjustments Pro forma
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $ 44,461 27,664 489 (D) 17,286
Cost of revenues 24,067 17,162 367 (D) 7,272
-------- ------- ------ -------
Gross profit 20,394 10,502 122 10,014
Selling and administrative expenses 16,221 6,270 0 9,951
Provision for doubtful accounts 1,373 175 0 1,198
Research and development expenses 1,322 1,112 0 210
-------- ------- ------ -------
Operating profit (loss) 1,478 2,945 122 (1,345)
Interest income 760 71 61 (E) 750
Interest expense (520) (443) 0 (77)
Other income (expense), net (288) (16) 0 (272)
Minority interest (214) 0 - (214)
-------- ------- ------ -------
Earnings (loss) before income tax
expense and minority interest
in net earnings of subsidiaries 1,216 2,557 183 (1,158)
Income tax expense 260 1,010 750 (F) 0
-------- ------- ------ -------
Earnings (loss) before minority interest
in net earnings of subsidiaries 956 1,547 (567) (1,158)
-------- ------- ------ -------
Minority interest in net earnings
of subsidiary 294 0 (294)(G) 0
-------- ------- ------ -------
Earnings (loss) from continuing operations $ 662 1,547 (273) (1,158)
======== ======= ====== =======
Net earnings (loss) per common share and
common share equivalent from continuing
operations $ 0.04 ($0.07)
======== =======
Weighted average number of common
shares and common share equivalents 15,750 15,750
======== =======
</TABLE>
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HEALTHDYNE, INC.
UNAUDITED NOTES TO PRO FORMA CONSOLIDATED
CONDENSED FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS)
(A) Reflects the deletion of the elimination of the deferred tax asset of
Healthdyne Technologies, Inc. and an offsetting increase in "Other
Current Liabilities" resulting in the continued reporting of the
deferred tax asset that remains with the Company after the Distribution
of Healthdyne Technologies, Inc.
(B) Reflects the reclassification of the amount due from Healthdyne
Technologies, Inc.
(C) Reflects the exchange of the Company's investment in redeemable
preferred stock of Healthdyne Technologies, Inc. for a $3,500 note
receivable of Healthdyne Technologies, Inc., bearing interest at the
rate of 7% per annum, payable in four semi-annual installments
beginning June 30, 1995.
(D) Reflects the deletion of the elimination of revenues and cost of
revenues arising from intercompany transactions.
(E) Reflects additional interest income resulting from the exchange of
the Company's investment in redeemable preferred stock of Healthdyne
Technologies, Inc. for a $3,500, 7% interest bearing note of Healthdyne
Technologies, Inc.
(F) Reflects the adjustment to income tax expense. No tax benefit is
recognized by the Company on the pro forma loss before income tax
expense due to the Company's available net operating loss
carryforwards.
(G) Reflects the elimination of minority interest in net earnings of
Healthdyne Technologies, Inc.
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(c) Exhibits.
Exhibit Description
- ------- -----------
(10)(rr) Distribution Agreement, dated as of April 21, 1995, by
and between Healthdyne, Inc. and Healthdyne
Technologies, Inc. (Incorporated by reference to
Exhibit 10.18 filed with the Current Report on Form
8-K of Healthdyne Technologies, Inc. dated May 1,
1995.)
(10)(ss) Tax Sharing Agreement, dated as of April 21, 1995, by
and between Healthdyne, Inc. and Healthdyne
Technologies, Inc. (Incorporated by reference to
Exhibit 10.19 filed with the Current Report on Form
8-K of Healthdyne Technologies, Inc. dated May 1,
1995.)
(10)(tt) Tax Indemnity Agreement, dated as of April 21, 1995,
by and between Healthdyne, Inc. and Healthdyne
Technologies, Inc. (Incorporated by reference to
Exhibit 10.20 filed with the Current Report on Form
8-K of Healthdyne Technologies, Inc. dated May 1,
1995.)
(10)(uu) Corporate Services Agreement, dated as of April 21,
1995, by and between Healthdyne, Inc. and Healthdyne
Technologies, Inc. (Incorporated by reference to
Exhibit 10.21 filed with the Current Report on Form
8-K of Healthdyne Technologies, Inc. dated May 1,
1995.)
(10)(vv) OEM Design and Manufacturing Agreement, dated as of
April 21, 1995, by and between Healthdyne, Inc. and
Healthdyne Technologies, Inc. (Incorporated by
reference to Exhibit 10.22 filed with the Current
Report on Form 8-K of Healthdyne Technologies, Inc.
dated May 1, 1995.)
(10)(ww) Tradename License Agreement, dated as of April 21,
1995, by and between Healthdyne, Inc. and Healthdyne
Technologies, Inc. (Incorporated by reference to
Exhibit 10.23 filed with the Current Report on Form
8-K of Healthdyne Technologies, Inc. dated May 1,
1995.)
(10)(xx) Amendment to Distribution Agreement, dated May 4,
1995, between Healthdyne, Inc. and Healthdyne
Technologies, Inc. (Incorporated by reference from
the Healthdyne, Inc. Quarterly Report on Form 10-Q for
the period ended March 31, 1995.)
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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 hereunto duly authorized.
HEALTHDYNE, INC.
Date: June 1, 1995 Donald R. Millard
-----------------------------------
Donald R. Millard
Vice President - Finance,
Chief Financial Officer and
Treasurer
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