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) September 4, 1996.
GRAHAM-FIELD HEALTH PRODUCTS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-8801 NY 11-2578230
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
400 Rabro Drive East, Hauppauge, New York 11788
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 582-5900
Not Applicable
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(Former name or former address, if changed since last report.)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On September 4, 1996 (the "Closing Date"), Graham-Field Health
Products, Inc., a Delaware corporation (the "Registrant"), through its
wholly-owned subsidiary, Graham-Field Express (Puerto Rico), Inc. ("GFPR"), a
Delaware corporation, acquired substantially all of the assets, including, but
not limited to, accounts receivable, inventory, customer lists, dealer lists and
advertising materials (the "Assets") of V.C. Medical Distributors Inc. ("V.C.
Medical"), a corporation organized under the laws of the commonwealth of Puerto
Rico, pursuant to an Asset Purchase Agreement dated as of September 4, 1996 (the
"Asset Purchase Agreement"), by and among the Registrant, GFPR and V.C. Medical.
The Asset Purchase Agreement contains customary representations and warranties
of the parties. Under the terms of the Asset Purchase Agreement, the obligations
of V.C. Medical were guaranteed by the former principal of V.C. Medical, Vicente
Guzman, Jr., and his wife. In accordance with the terms and provisions of the
Asset Purchase Agreement, GFPR acquired the Assets for a purchase price (the
"Purchase Price") consisting of (i) $1,703,829.00 in cash, and (ii) the issuance
and delivery of 32,787 shares (the "Shares") of common stock, par value $.025
per share, of the Registrant valued at $7.625 per share representing the closing
market price of the common stock of the Registrant on the last trading day
immediately prior to the Closing Date. In addition, GFPR assumed certain
liabilities of V.C. Medical in the approximate amount of $296,721. The Purchase
Price is subject to adjustment if the final determination of the closing date
net book value (as defined in the Asset Purchase Agreement) of the Assets
acquired and liabilities assumed by GFPR is greater than or less than
$1,018,406.50. Pursuant to the terms of the Asset Purchase Agreement, in the
event the pretax income of the acquired business equals or exceeds $1,000,000
during the twelve (12) months following the closing date, an additional $500,000
in cash will be paid to V.C. Medical. The Shares were delivered to an escrow
agent to be held until February 4, 1998, whereupon the Shares will be released
to V.C. Medical, subject to any claims for indemnification or purchase price
adjustments in favor of GFPR.
The former principal of V.C. Medical, Vicente Guzman, Jr., entered
into a five (5) year employment agreement dated as of September 4, 1996,
pursuant to which Mr. Guzman has been appointed the President of GFPR. GFPR will
operate under the name "GF Express, Puerto Rico."
V.C. Medical, a formerly privately-owned company, was a distributor
of home healthcare products, generating annual revenues of approximately $5
million.
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<PAGE>
Item 7. Financial Statements, Pro-Forma Financial Information and Exhibits.
(a) Financial Statements:
(a)(1)- Independent Auditor Report for 1994 and 1993.*
(a)(2)- Balance Sheet as of December 31, 1994 and 1993.*
(a)(3)- Income Statement for the period ending December
31, 1994 and 1993.*
(a)(4)- Statement of Cash Flow for the period ending
December 31, 1994 and 1993.*
(a)(5)- Notes to Financial Statements for December 31,
1994 and 1993.*
(a)(6)- Independent Auditor Report for 1995.*
(a)(7)- Balance Sheet as of December 31, 1995.*
(a)(8)- Income and Retained Earnings Statement for the
period ending December 31, 1995.*
(a)(9)- Statement of Cash Flow for the period ending
December 31, 1995.*
(a)(10)- Notes to Financial Statements for December 31,
1995.*
(b) Pro-Forma Financial Information and Interim Financial
Statements.
(b)(1)- Pro-Forma Financial Information.
- --------
* Such items were previously furnished to the Securities and Exchange
Commission in connection with the filing of the Registrant's Form 8-K
(Date of Event Reported: September 4, 1996) on September 17, 1996.
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<PAGE>
(c) Exhibits:
Exhibit No. Description
2(a) Asset Purchase Agreement** dated as of
September 4, 1996, by and among
Graham-Field Health Products, Inc. (the
"Registrant"), Graham-Field Express
(Puerto Rico), Inc. ("GFPR"), and V.C.
Medical Distributors, Inc. ("V.C.
Medical").***
10(a) Escrow Agreement dated as of September 4,
1996, by and among GFPR, V.C. Medical and
the Bank & Trust of Puerto Rico.***
10(b) Employment Agreement dated as of September
4, 1996, by and between GFPR and Vicente
Guzman, Jr.***
99(a) Press Release dated June 28, 1996.***
99(b) Press Release dated September 5, 1996.***
- ----------
** The Registrant shall furnish all omitted schedules and exhibits to the
Asset Purchase Agreement dated as of September 4, 1996, by and among the
Registrant, GFPR and V.C. Medical, upon the request of the Securities and
Exchange Commission.
*** The Registrant furnished such exhibits to the Securities and Exchange
Commission in connection with the filing of the Registrant's Form 8-K
(Date of Event Reported: September 4, 1996) on September 17, 1996.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
GRAHAM-FIELD HEALTH PRODUCTS, INC.
Date: November 18, 1996 By: s/Irwin Selinger
-----------------------------
Irwin Selinger
Chairman of the Board and
Chief Executive Officer
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<PAGE>
EXHIBIT INDEX
Item No. Description Page No.
- -------- ----------- --------
(a) Financial Statements:
(a)(1) Independent Auditor Report for 1994 and ****
1993.
(a)(2) Balance Sheet as of December 31, 1994 and ****
1993.
(a)(3) Income Statement for the period ending ****
December 31, 1994 and 1993.
(a)(4) Statement of Cash Flow for the period ****
ending December 31, 1994 and 1993.
(a)(5) Notes to Financial Statements for December ****
31, 1994 and 1993.
(a)(6) Independent Auditor Report for 1995. ****
(a)(7) Balance Sheet as of December 31, 1995. ****
(a)(8) Income and Retained Earnings Statement for ****
the period ending December 31, 1995.
(a)(9) Statement of Cash Flow for the period ****
ending December 31, 1995.
(a)(10) Notes to Financial Statements for December ****
31, 1995.
(b) Pro-Forma Financial Information and Interim Financial
Statements:
(b)(1) Pro-Forma Financial Information.
- ----------
**** The Registrant furnished such exhibits to the Securities and Exchange
Commission in connection with the filing of the Registrant's Form 8-K
(Date of Event Reported: September 4, 1996) on September 17, 1996.
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<PAGE>
Item No. Description Page No.
- -------- ----------- --------
(c) Exhibits:
2(a) Asset Purchase Agreement dated as of ****
September 4, 1996, by and among Graham-
Field Health Products, Inc. (the
"Registrant"), Graham-Field Express
(Puerto Rico), Inc. ("GFPR"), and V.C.
Medical Distributors, Inc. ("V.C.
Medical").
10(a) Escrow Agreement dated as of September 4, ****
1996, by and among GFPR, V.C. Medical and
Bank & Trust of Puerto Rico.
10(b) Employment Agreement dated as of September ****
4, 1996, by and between GFPR and Vicente
Guzman, Jr.
99(a) Press Release dated June 28, 1996. ****
99(b) Press Release dated September 5, 1996. ****
- ----------
**** The Registrant furnished such exhibits to the Securities and Exchange
Commission in connection with the filing of the Registrant's Form 8-K
(Date of Event Reported: September 4, 1996) on September 17, 1996.
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<PAGE>
EXHIBIT (b)(1)
PRO-FORMA FINANCIAL INFORMATION
<PAGE>
PRO-FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
GRAHAM-FIELD HEALTH PRODUCTS, INC. AND SUBSIDIARIES
AND V.C. MEDICAL DISTRIBUTORS, INC.
(Unaudited)
On September 4, 1996, Graham-Field Health Products, Inc., through its
wholly-owned subsidiary, Graham-Field Express (Puerto Rico), Inc. acquired
substantially all of the assets of V.C. Medical Distributors, Inc. ("V.C.
Medical").
The following pro-forma condensed consolidated statements of operations
for the nine months ending September 30, 1996 and the year ended December 31,
1995 give effect to the purchase of substantially all of the assets of V.C.
Medical. A pro-forma condensed consolidated balance sheet is not presented since
the transaction is already reflected in the Consolidated Balance Sheet of
Graham-Field Health Products, Inc. as of September 30, 1996 included in the
Company's Form 10-Q for the quarter ended September 30, 1996. The pro-forma
information is based on the historical financial statements of Graham-Field
Health Products, Inc. and V.C. Medical giving effect to the transaction under
the purchase method of accounting and assumptions and adjustments in the
accompanying notes to the pro-forma financial statements.
The pro-forma condensed consolidated financial statements have been
prepared by Graham-Field Health Products, Inc. management based upon the V.C.
Medical audited financial statements for the year ended December 31, 1995 and
the interim unaudited financial statements for the eight month period ended
August 31, 1996, which is prior to the date of closing of the acquisition. These
pro-forma statements may not be indicative of the results that actually would
have occurred if the purchase had been made as of January 1, 1995, or of results
which may occur in the future. The pro-forma financial statements should be read
in conjunction with the audited financial statements and notes of Graham-Field
Health Products, Inc. and V.C. Medical for the year ended December 31, 1995 and
the unaudited interim financial statements and notes of Graham-Field Health
Products, Inc. and V.C. Medical.
<PAGE>
PRO-FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
GRAHAM-FIELD HEALTH PRODUCTS, INC. AND SUBSIDIARIES
For The Nine Months Ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Pro-Forma Pro-Forma
As Reported V.C. Medical Adjustments Consolidated
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
REVENUES:
Operations $ 88,877,000 $ 3,161,000 $ -- - $92,038,000
Interest and other
income 483,000 29,000 512,000
------------ ----------- -----------
89,360,000 3,190,000 92,550,000
COSTS AND
EXPENSES:
Cost of revenues 60,241,000 2,385,000 62,626,000
Selling, general
and administrative 23,082,000 282,000 16,000 (a) 23,380,000
Interest expense 1,886,000 -- 91,000 (b) 1,977,000
------------ ----------- ----------- -----------
85,209,000 2,667,000 107,000 87,983,000
INCOME BEFORE
INCOME TAXES 4,151,000 523,000 (107,000) 4,567,000
INCOME TAXES 1,861,000 182,000 5,000 (c) 2,048,000
------------ ----------- ----------- -----------
NET INCOME $ 2,290,000 $ 341,000 $ (112,000) $ 2,519,000
============ =========== =========== ===========
PER SHARE DATA:
NET INCOME PER
SHARE $ .16 $ .17
============ ===========
WEIGHTED AVERAGE
NUMBER OF COMMON
AND COMMON
EQUIVALENT SHARES
OUTSTANDING 14,483,000 14,513,000
============ ===========
</TABLE>
See notes to unaudited pro-forma condensed consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
PRO-FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
GRAHAM-FIELD HEALTH PRODUCTS, INC. AND SUBSIDIARIES
For The Year Ended December 31, 1995
(Unaudited)
Pro-Forma Pro-Forma
As Reported V.C. Medical Adjustments Consolidated
<S> <C> <C> <C> <C>
REVENUES:
Operations $100,113,000 $ 3,508,000 $ -- $103,621,000
Interest and other
income 290,000 22,000 312,000
------------ ----------- ------------
100,403,000 3,530,000 103,933,000
COSTS AND
EXPENSES:
Cost of revenues 68,883,000 2,682,000 71,565,000
Selling, general
and administrative 27,566,000 393,000 25,000 (a) 27,984,000
Interest expense 2,656,000 -- 136,000 (b) 2,792,000
------------ ----------- ----------- ------------
99,105,000 3,075,000 161,000 102,341,000
INCOME BEFORE
INCOME TAXES 1,298,000 455,000 (161,000) 1,592,000
INCOME TAXES 560,000 171,000 (39,000)(c) 692,000
------------ ----------- ---------- ------------
NET INCOME $ 738,000 $ 284,000 $ (122,000) $ 900,000
============ =========== ========== ============
PER SHARE DATA:
NET INCOME PER
SHARE $ .06 $ .07
============ ============
WEIGHTED AVERAGE
NUMBER OF COMMON
AND COMMON
EQUIVALENT SHARES
OUTSTANDING 13,332,000 13,365,000
============ ===========
</TABLE>
See notes to unaudited pro-forma condensed consolidated financial statements.
<PAGE>
NOTES TO PRO-FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
GRAHAM-FIELD HEALTH PRODUCTS, INC. AND SUBSIDIARIES
(Unaudited)
On September 4, 1996, Graham-Field Health Products, Inc., a Delaware
corporation (the "Company"), through its wholly-owned subsidiary, Graham-Field
Express (Puerto Rico), Inc. ("GFPR"), a Delaware corporation, acquired
substantially all of the assets, including, but not limited to, accounts
receivable, inventory, customer lists, dealer lists and advertising materials of
V.C. Medical Distributors Inc. ("V.C. Medical"), a corporation organized under
the laws of the commonwealth of Puerto Rico, pursuant to an Asset Purchase
Agreement dated as of September 4, 1996 (the "Asset Purchase Agreement") by and
among the Company, GFPR and V.C. Medical. Under the terms of the Asset Purchase
Agreement, the obligations of V.C. Medical were guaranteed by the former
principal of V.C. Medical, Vicente Guzman, Jr., and his wife. In accordance with
the terms and provisions of the Asset Purchase Agreement, GFPR acquired the
Assets for a purchase price (the "Purchase Price") consisting of (i)
$1,703,829.00 in cash, and (ii) the issuance and delivery of 32,787 shares (the
"Shares") of common stock, par value $.025 per share, of the Company valued at
$7.625 per share representing the closing market price of the common stock of
the Company on the last trading day immediately prior to the Closing Date. In
addition, GFPR assumed certain liabilities of V.C. Medical in the approximate
amount of $296,721. The Purchase Price is subject to adjustment if the final
determination of the closing date net book value (as defined in the Asset
Purchase Agreement) of the Assets acquired and liabilities assumed by GFPR is
greater than or less than $1,018,406.50. Pursuant to the terms of the Asset
Purchase Agreement, in the event the pretax income of the acquired business
equals or exceeds $1,000,000 during the twelve (12) months following the closing
date, an additional $500,000 in cash will be paid to V.C. Medical. The Shares
were delivered to an escrow agent to be held until February 4, 1998, whereupon
the Shares will be released to V.C. Medical, subject to any claims for
indemnification or purchase price adjustments in favor of GFPR.
The former principal of V.C. Medical, Vicente Guzman, Jr., entered
into a five (5) year employment agreement dated as of September 4, 1996,
pursuant to which Mr. Guzman has been appointed the President of GFPR. GFPR will
operate under the name "GF Express, Puerto Rico."
V.C. Medical, a formerly privately-owned company, was a distributor
of home healthcare products, generating annual revenues of approximately $5
million.
<PAGE>
The following are explanations of the pro-forma adjustments:
For the nine months ended September 30, 1996:
A. Selling, General and Administrative:
Increase in amortization of goodwill
acquired: $ 16,000
========
B. Interest Expense: Interest expense based on
the Company having to borrow the $1,703,829
cash purchase price of V.C. Medical for the
period January 1, 1996 to August 31, 1996.
Interest for the month of September 1996 is
already included in the condensed
consolidated financial statements of the
Company. Interest rate used was 8.0%, the
Company's effective borrowing rate during
the period: $ 91,000
========
C. Income Tax Expense: To provide tax expense
on the V.C. Medical pro-forma income for the
period ending January 1, 1996 to August 31,
1996 at the Company's effective tax rate: $ 5,000
========
Pro-forma Adjustment for the Year Ended December 31, 1995:
A. Selling, General and Administrative:
Increase in amortization of goodwill
acquired: $ 25,000
========
B. Interest Expense: Interest expense based
on the Company having to borrow the
$1,703,829 cash purchase price of V.C.
Medical for the year ended December 31, 1995.
Interest rate used was 8.0%, the Company's
effective borrowing rate during the period: $136,000
========
C. Income Tax Expense: To provide tax expense
on the V.C. Medical pro-forma income for the
year ended December 31, 1995 at the
Company's effective tax rate: $(39,000)
========
