<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A NO. 1
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 28, 1997
COMMISSION FILE NO. 0-10552
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SCHERER HEALTHCARE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 59-0688813
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2859 PACES FERRY ROAD, SUITE 300, ATLANTA, GEORGIA 30339
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(770) 333-0066
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro Forma Financial Information.
The following unaudited pro forma condensed consolidated financial
information of Scherer Healthcare, Inc. (the "Company") is filed herewith or is
incorporated herein by reference to the Company's definitive Proxy Statement on
Schedule 14A dated July 2, 1997 for a special meeting of stockholders held on
July 28, 1997 (the "Proxy Statement").
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
June 30, 1997 (filed herewith)
Unaudited Pro Forma Condensed Consolidated Statement of Continuing
Operations for the Three Months Ended June 30, 1997 (filed herewith)
Unaudited Pro Forma Condensed Consolidated Statement of Continuing
Operations for the Years Ended March 31, 1997, 1996, 1995, and 1994
(set forth under the caption "Unaudited Pro Forma Condensed
Consolidated Financial Information" in the Proxy Statement and
incorporated herein by reference)
Notes to Unaudited Pro Forma Condensed Consolidated Financial
Information as of and for the Three Months Ended June 30, 1997
(filed herewith)
Notes to Unaudited Pro Forma Condensed Consolidated Financial Information
for the Years Ended March 31, 1997, 1996, 1995, and 1994 (set forth
under the caption "Unaudited Pro Forma Condensed Consolidated
Financial Information" in the Proxy Statement and incorporated
herein by reference)
The accompanying unaudited pro forma condensed consolidated financial
information gives effect to the transactions among the Company, Marquest Medical
Products, Inc. ("Marquest"), Vital Signs, Inc. ("VSI") and VSI Acquisition
Corporation ("Newco"). Pursuant to the terms of an Agreement and Plan of Merger
dated as of March 14, 1997, between Marquest, VSI, and Newco (the "Merger
Agreement"), VSI acquired Marquest, effective July 28, 1997, upon the merger of
Newco, a wholly-owned subsidiary of VSI, with and into Marquest (the "Merger").
At the effective time of the Merger, all of the issued and outstanding shares of
Marquest Common Stock were converted into the right to receive $0.797 in cash
per share and Marquest became a wholly-owned subsidiary of VSI. As a result, the
Company received $5,747,320 in exchange for its 7,211,192 shares of Marquest
Common Stock and $309,260 through the exercise of warrants to purchase Marquest
Common Stock. Additionally, pursuant to the terms of
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the Scherer Healthcare Inducement Agreement dated as of March 14, 1997,
between the Company, Marquest, and VSI, VSI purchased from the Company
certain assets of the Company leased or licensed by the Company to Marquest
and used by Marquest in the manufacture and sale of arterial blood gas
products (the "ABG Assets") and the Company entered into a covenant not to
compete with VSI in the manufacture and sale of arterial blood gas products
for a period of three years. VSI paid the Company an aggregate of $5,860,000
for the ABG Assets and the covenant not to compete. The Merger, the sale of
the ABG Assets by the Company to VSI, and the execution of the covenant not
to compete are hereinafter collectively referred to as the "Scherer
Transactions."
The operations of Marquest are included in the Company's Medical Device and
Surgical/Safety Disposables Segment along with the operations of Scherer
Healthcare, Ltd. ("Scherer Ltd."), a limited partnership that was 65% owned by
the Company, whose assets and businesses were sold in two separate transactions
in October 1995 and October 1996. Effective July 28, 1997, the operations of the
Medical Device and Surgical/Safety Disposables Segment will be accounted for as
a discontinued segment, and accordingly, the operations of Marquest and Scherer
Ltd. will be segregated and reported as discontinued operations in the Company's
consolidated financial statements after such date.
The following unaudited pro forma condensed consolidated balance sheet gives
effect to the Scherer Transactions as if they had occurred on June 30, 1997, and
the unaudited pro forma condensed consolidated statement of continuing
operations for the three months ended June 30, 1997, present the operating
results of the Company as if the Scherer Transactions had occurred on April 1,
1997. The unaudited pro forma balance sheet and operating statement are based on
previously described financial information of the Company as of and for the
three months ended June 30, 1997, and the pro forma adjustments described in the
Notes to Unaudited Pro Forma Condensed Consolidated Financial Information
included herein.
The unaudited pro forma condensed consolidated financial information is
presented for illustrative purposes only and is not necessarily indicative of
the operating results or financial position that actually would have occurred if
the Scherer Transactions had been consummated as of such dates in accordance
with the assumptions set forth below, nor is it necessarily indicative of future
operating results for financial position.
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SCHERER HEALTHCARE, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
COMPANY PRO FORMA COMPANY
AS REPORTED ADJUSTMENTS PRO FORMA
------------- -------------- -------------
<S> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 3,483,000 $ 4,189,000 (a) $ 13,532,000
5,860,000 (b)
Accounts receivable, net 5,970,000 (3,117,000)(c) 2,853,000
Current maturities of notes receivable 257,000 (90,000)(c) 167,000
Inventories 3,301,000 (3,125,000)(c) 176,000
Prepaid and other 319,000 (241,000)(c) 78,000
------------- -------------- ---------------
Total current assets 13,330,000 3,476,000 16,806,000
PROPERTY AND EQUIPMENT 16,752,000 (8,655,000)(c) 7,852,000
(245,000)(b)
Less accumulated depreciation (6,911,000) 2,478,000 (c) (4,263,000)
170,000 (b)
------------- -------------- ---------------
Net property and equipment 9,841,000 (6,252,000) 3,589,000
OTHER ASSETS
Cost in excess of net assets acquired, net 6,339,000 (3,919,000)(b) 2,420,000
Intangibles, net 307,000 (62,000)(c) 245,000
Other 1,707,000 -- 1,707,000
Net assets of discontinued operations 375,000 -- 375,000
------------- -------------- ----------------
Total other assets 8,728,000 (3,981,000) 4,747,000
------------- -------------- ----------------
TOTAL ASSETS $ 31,899,000 $ (6,757,000) $ 25,142,000
------------- -------------- ----------------
------------- -------------- ----------------
</TABLE>
See notes to unaudited pro forma condensed consolidated financial information
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SCHERER HEALTHCARE, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMPANY PRO FORMA COMPANY
AS REPORTED ADJUSTMENTS PRO FORMA
-------------- ---------------- ----------------
<S> <C> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 2,092,000 $ (1,042,000)(c) $ 1,050,000
Accrued expenses 3,430,000 (2,091,000)(c) 1,739,000
400,000 (d)
Current maturities of debt obligations 1,233,000 (774,000)(c) 208,000
(251,000)(a)
Other 93,000 140,000 (e) 233,000
------------- ---------------- ---------------
Total current liabilities 6,848,000 (3,618,000) 3,230,000
LONG-TERM DEBT, net of current maturities 6,328,000 (4,336,000)(c) 375,000
(1,617,000)(a)
OTHER LIABILITIES 320,000 235,000 (b) 555,000
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST IN SUBSIDIARY 2,010,000 (2,010,000)(c) --
STOCKHOLDERS' EQUITY 16,393,000 4,589,000 (f) 20,982,000
------------- ---------------- ----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 31,899,000 $(6,757,000) $ 25,142,000
------------- ---------------- ----------------
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</TABLE>
See notes to unaudited pro forma condensed consolidated financial information
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SCHERER HEALTHCARE, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF CONTINUING OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
(G)
PRO FORMA
COMPANY ADJUSTMENTS PRO FORMA COMPANY
AS REPORTED FOR MARQUEST ADJUSTMENTS PRO FORMA
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
NET SALES $ 8,775,000 $ (5,269,000) $ -- $ 3,506,000
COSTS AND EXPENSES
Cost of goods sold 5,364,000 (3,404,000) -- 1,960,000
Selling, general, and administrative 2,599,000 (1,337,000) (58,000)(h) 1,204,000
Research and development 63,000 (63,000) -- --
------------ ------------- ------------ ------------
Total costs and expenses 8,026,000 (4,804,000) (58,000) 3,164,000
------------ ------------- ------------ ------------
OPERATING INCOME 749,000 (465,000) 58,000 342,000
OTHER INCOME (EXPENSE), net (293,000) 299,000 40,000(i) 46,000
------------ ------------- ------------ ------------
Income from continuing operations before minority
interest and income taxes 456,000 (166,000) 98,000 388,000
Minority interest in net income of subsidiary and
partnerships (37,000) 37,000 -- --
------------ ------------- ------------ ------------
Income from continuing operations before taxes 419,000 (129,000) 98,000 388,000
Benefit (provision) for income taxes 11,000 -- -- 11,000
------------ ------------- ------------ ------------
Income from continuing operations $ 430,000 $ (129,000) $ 98,000 $ 399,000
------------ ------------- ------------ ------------
------------ ------------- ------------ ------------
Income from continuing operations per common share $ 0.10 $ 0.09
------------ ------------
------------ ------------
Weighted average common shares outstanding 4,418,483 4,418,483
------------ ------------
------------ ------------
</TABLE>
See notes to unaudited pro forma condensed consolidated financial information
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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(a) Pursuant to the terms of the Merger Agreement, the Marquest
shareholders received $0.797 per share for each outstanding share
of Marquest Common Stock. In total, the Company received
approximately $6,057,000 in cash for the 7,211,192 shares of
Marquest Common Stock that it owned directly and the warrants that
it held for the purchase of an additional 6,580,000 shares of
Marquest Common Stock at an exercise price of $0.75 per share. The
Company used a portion of the proceeds from the Merger to repay the
balance of a promissory note ($1,868,000 as of June 30, 1997).
(b) Represents the $5,860,000 in cash proceeds the Company
received in exchange for the ABG Assets and the covenant not to
compete. The purchase price for the ABG Assets was $5,625,000 and
the consideration for the covenant not to compete was $235,000. The
proceeds for the covenant not to compete will be reported as
deferred income and amortized over a three year period from July
28, 1997.
(c) Reflects the pro forma effects of the Company's 51%
interest in Marquest as if the Merger had occurred on June 30,
1997. Marquest has been included in the Company's consolidated
financial statements since the first quarter of fiscal 1994.
Minority interest represents the equity interest in Marquest of
outside investors.
(d) Reflects the accrual of estimated transaction costs
associated with the Scherer Transactions. Due to their
non-recurring nature, the estimated transaction costs associated
with the Scherer Transactions were not considered in the pro forma
condensed consolidated statements of continuing operations for the
three months ended June 30, 1997.
(e) Reflects the estimated income tax effect from the Scherer
Transactions.
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Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements (Continued)
(f) Reflects the estimated impact to stockholders' equity from
the Scherer Transactions as follows:
<TABLE>
<CAPTION>
<S> <C>
Merger Agreement:
Cash proceeds (see Note (a) above) $6,057,000
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Investment in Marquest, at cost 5,215,000
Allocation of the Company's portion
of Marquest's accumulated losses through
June 30, 1997 (2,656,000)
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Net investment in Marquest 2,559,000
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Estimated gain before income taxes 3,498,000
Estimated income taxes on gain (63,000)
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Estimated gain, net of tax $3,435,000
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ABG Assets:
Cash proceeds (see Note (b) above) $5,625,000
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Net book value of ABG Assets 3,994,000
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Estimated gain before income taxes 1,631,000
Estimated income taxes on gain (77,000)
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Estimated gain, net of tax $1,554,000
----------
----------
</TABLE>
The estimated gain from the Merger will be further adjusted by Marquest's
operations from July 1, 1997 through July 28, 1997 (the date of closing).
Additionally, the Company has estimated $400,000 in transaction costs associated
with the Scherer Transactions (see Note (d) above).
Due to their non-recurring nature, the estimated gains from the Scherer
Transactions were not considered in the pro forma condensed consolidated
statements of continuing operations for the three months ended June 30, 1997.
(g) Reflects the elimination of the operations of Marquest for the three
months ended June 30, 1997.
(h) Reflects the elimination of amortization and depreciation expense
associated with the ABG Assets for the three months ended June 30,
1997.
(i) Reflects the elimination of interest expense associated with the
repayment of a promissory note (debt payable to an affiliated company
prior to March 1997) for the three months ended June 30, 1997.
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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 behalf of the undersigned
hereunto duly authorized.
SCHERER HEALTHCARE, INC.
Date: October 10, 1997 By: /s/ Robert P. Scherer, Jr.
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Robert P. Scherer, Jr.
Chairman and Chief Executive Officer
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