<PAGE>
UNITED STATES
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 earliest event reported: June 11, 1996
UCI Medical Affiliates, Inc.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
Delaware 0-13265 59-2225346
<S> <C> <C>
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)
</TABLE>
1901 Main Street, Suite 1200, Mail Code 1105, Columbia, South Carolina 29201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (803) 252-3661
No Change
(Former name or former address, if changed since last report.)
This document contains a total of 21 pages.
Page 1 of 21
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This Form 8-K/A amends the Form 8-K filed with the Securities and Exchange
Commission on June 21, 1996 by UCI Medical Affiliates, Inc., a Delaware
corporation (the "Company"), and is filed to include the financial statements
required by Item 7 of Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
a) Financial Statements of Business Acquired
The financial statements for Wateree Emergency
Specialists, P.A., the business acquired by the
wholly-owned subsidiary of the Company, are included
in this report beginning on page number 3.
b) Pro Forma Financial Information
The pro forma financial information for Wateree
Emergency Specialists, P.A., the business acquired
by the wholly-owned subsidiary of the Company, is
included in this report following the financial
information included herein in response to Item 7(a)
above.
c) Exhibits
The following exhibit is incorporated by reference
to the exhibit of the same number filed with the
Company's Form 8-K filed on June 21, 1996.
Exhibit 2.1 - Asset Purchase Agreement and Plan of
Reorganization dated and executed on June 11, 1996
by and between Wateree Emergency Specialists, P.A.
and UCI Medical Affiliates of South Carolina, Inc.
Page 2 of 21
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Report on Audit of the Financial Statements of
Wateree Emergency Specialists, P.A.
as of December 31, 1995 and 1994
Page 3 of 21
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CONTENTS
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Page
<S> <C>
Wateree Emergency Specialists, P.A. Financial Statements
as of December 31, 1995 and 1994................................................6-12
UCI Medical Affiliates, Inc. Pro Forma Combining Financial Statements
Combining Balance Sheet at September 30, 1995.....................................13
Notes to Combining Balance Sheet..................................................14
Combining Statement of Operations and Accumulated Deficit
for year ended September 30, 1995..........................................15
Notes to Combining Statement of Operations........................................16
UCI Medical Affiliates, Inc. Pro Forma Combining Financial Statements
Combining Balance Sheet at June 30, 1996..........................................17
Notes to Combining Balance Sheet..................................................18
Combining Statement of Operations and Accumulated Deficit
for the six months ended June 30, 1996...........................................19
Notes to Combining Statement of Operations........................................20
</TABLE>
Page 4 of 21
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Report of Independent Accountants
Board of Directors
UCI Medical Affiliates, Inc.
We have audited the accompanying balance sheets of Wateree Emergency
Specialists, P.A. (the "Company") as of December 31, 1995 and 1994 and the
related statements of operations and retained earnings, and cash flows for the
periods 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 Wateree Emergency Specialists,
P.A. as of December 31, 1995 and 1994, and the results of its operations and its
cash flows for the periods then ended in conformity with generally accepted
accounting principles.
The financial statements have been prepared solely from the accounts of Wateree
Emergency Specialists, P.A. and do not include the personal accounts of the
stockholders or those of any other operations in which they may be engaged.
THE ORIGINAL SIGNED OPINION LETTER IS ON FILE WITH
UCI MEDICAL AFFILIATES, INC.
Columbia, South Carolina
August 9, 1996
Page 5 of 21
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Wateree Emergency Specialists, P.A.
Balance Sheets
December 31,
1995 1994
ASSETS
Current assets: $
Cash and cash equivalents -- 1,675
Accounts receivable, net 14,322 12,315
------- -------
Total current assets 14,322 13,990
------- -------
Furniture and equipment, net 17,151 21,730
Other assets 3,479 500
------- -------
20,630 22,230
------- -------
Total assets $34,952 $36,220
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable and accrued expenses $19,702 $ 7,550
Note payable to shareholder 6,063 6,063
Line of credit payable -- 4,337
Due to affiliated company -- 361
------- -------
Total current liabilities 25,765 18,311
------- -------
Stockholder's equity
Capital stock, no par value;
100,000 shares authorized;
3,000 shares issued and
outstanding 3,000 3,000
Retained earnings 6,187 14,909
------- -------
Stockholder's equity 9,187 17,909
------- -------
Total liabilities and stockholder's equity $34,952 $36,220
======= =======
The accompanying notes are an integral part of these financial statements.
Page 6 of 21
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Wateree Emergency Specialists, P.A.
Statements of Operations and Retained Earnings
for the years ended December 31,
1995 1994
---------- ---------
Net medical revenue $ 674,195 $ 580,492
Operating costs 622,491 498,696
--------- ---------
Operating margin 51,704 81,796
Depreciation and amortization 7,080 7,637
General and administrative expenses 52,884 51,024
--------- ---------
Income (loss) from operations (8,260) 23,135
Interest expense 462 920
--------- ---------
Net (loss) income (8,722) 22,215
Retained earnings, beginning of year 14,909 (7,306)
--------- ---------
Retained earnings, end of year $ 6,187 $ 14,909
========= =========
The accompanying notes are an integral part of these financial statements.
Page 7 of 21
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Wateree Emergency Specialists, P.A.
Statements of Cash Flows
for the years ended December 31,
<TABLE>
<CAPTION>
1995 1994
--------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net (loss) income $ (8,722) $ 22,215
Adjustments to reconcile net income to cash provided (used) by operating activities:
Depreciation and amortization 7,080 7,637
Changes in operating assets and liabilities:
Accounts receivable (2,007) (2,460)
Other assets (2,979) --
Due to related party (361) --
Accounts payable and accrued expenses 12,153 (1,662)
-------- --------
Cash provided by operating activities 5,164 25,730
-------- --------
INVESTING ACTIVITIES:
Purchases of furniture and equipment (2,502) (12,106)
-------- --------
Cash used by investing activities (2,502) (12,106)
-------- --------
FINANCING ACTIVITIES:
Repayments on line of credit (4,337) (12,439)
-------- --------
Cash used by financing activities (4,337) (12,439)
-------- --------
Net increase (decrease) in cash and cash equivalents (1,675) 1,185
Cash and cash equivalents, beginning of year 1,675 490
======== ========
Cash and cash equivalents, end of year $ -- $ 1,675
======== ========
Supplemental cash flow information:
Cash paid for interest $ 462 $ 920
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 8 of 21
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Wateree Emergency Specialists, P.A.
Notes to Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Elaine B. Baxley, M.D., Ronald P. Hargrave, M.D., and Guy B. Kahler, M.D. are
joint and equal stockholders of Wateree Emergency Specialists, P.A. (the
"Company") located in Lugoff, South Carolina. The Company commenced operations
in April 1989 and conducts business under the name Wateree Medical Center. The
Company operates a family practice medical office that provides treatments on an
outpatient basis for medical conditions not involving an immediate threat to
life.
The financial statements have been prepared solely from the accounts of the
Company and do not include the personal accounts of the stockholders or those of
any other activities in which they may be engaged. Management makes estimates
that are a necessary part of the preparation of financial statements. These
estimates include the useful lives of equipment, some of which is subject to
technological obsolescence, and the net realizable value of patient accounts
receivable. At December 31, 1995, management is not aware of any conditions that
could significantly affect the estimates employed in the preparation of the
financial statements.
ACCOUNTS RECEIVABLE
Accounts receivable represent amounts due from patients, employers and various
third-party payors. Provisions for uncollectable amounts are made based on
management's estimates of future collectability and historical payment
percentages.
FURNITURE AND EQUIPMENT
Furniture and equipment is reported at cost. Depreciation for financial
reporting purposes is computed principally by accelerated methods over the
estimated useful lives of the assets, which range from five to seven years.
Maintenance, repairs and the cost of minor equipment are charged to expense.
Major renewals or betterments, which prolong the life of the assets, are
capitalized. Upon disposal of depreciable property, the asset accounts are
reduced by the related cost and accumulated depreciation. The resulting gains
and losses are reflected in the statements of operations.
Page 9 of 21
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Wateree Emergency Specialists, P.A.
Notes to Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES
The company has elected S Corporation status as is provided by the Internal
Revenue Code. Under this election, the revenues and expenses of the Company are
reported on the personal income tax returns of the shareholders. Accordingly,
provision for income tax expense has not been made in the financial statements.
CASH EQUIVALENTS
The Company considers all short-term debt investments with a maturity of three
months or less at the date of acquisition to be cash equivalents.
FAIR VALUE OF FINANCIAL INVESTMENTS
The fair value of accounts receivable and accrued expenses payable are estimated
by management to approximate their respective carrying values. The fair value of
the non-interest bearing demand note payable to a shareholder is estimated by
management to be negligible.
2. DESCRIPTION OF LEASING ARRANGEMENTS
The Company leases certain minor medical and office equipment under operating
lease arrangements. The company leases its office space under a month-to-month
operating lease executed with an entity owned by the Company's stockholders.
Total rental expense was $32,239 and $26,501 for the year ended December 31,
1995 and 1994, respectively.
Page 10 of 21
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Wateree Emergency Specialists, P.A.
Notes to Financial Statements
3. FURNITURE AND EQUIPMENT
At December 31, 1995 and 1994, furniture and equipment consisted of the
following:
1995 1994
-------- --------
Office and medical equipment $ 34,253 $ 32,697
Furniture and fixtures 12,892 11,947
Leasehold improvements 2,650 2,650
-------- --------
49,795 47,294
Accumulated depreciation (32,644) (25,564)
-------- --------
Furniture and equipment, net $ 17,151 $ 21,730
======== ========
4. RELATED PARTY TRANSACTIONS
The stockholders participate in the medical activities of the Company. All
payments for services and benefits to the stockholders are recorded as
commissions and are included in cost of operations in the financial statements.
For the periods ended December 31, 1995 and 1994, commissions paid to the
stockholders totaled $183,091 and $137,184, respectively. At December 31, 1995
and 1994, the company was indebted to the stockholders in the amount of $6,063
and $6,063, respectively, on a non-interest bearing demand basis. The Company
leases its office facility from an affiliated entity (Note 2).
5. CONCENTRATION OF CREDIT RISK
In the normal course of providing health care services, the Company extends
credit to patients in the Lugoff, South Carolina area without requiring
collateral. Each individual's ability to pay balances due the Company is
assessed and reserves are established to provide for management's estimate of
uncollectable balances. Future revenues of the Company are largely dependent on
third-party payors and include Medicare and private insurance companies. The
amount of loss the Company would incur in the event of non-payment by the
counter party is the amount of the patient billing.
6. CONTINGENCIES
At December 31, 1995, management and its legal counsel are not aware of any
pending or threatened litigation, or unasserted claims against the Company that
could result in losses, if any, that would be material to the financial
statements.
Page 11 of 21
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Wateree Emergency Specialists, P.A.
Notes to Financial Statements
7. SUBSEQUENT EVENT
On June 11, 1996 UCI Medical Affiliates of South Carolina, Inc. ("UCI") acquired
the cash, accounts receivable, certain office and medical equipment and
substantially all the Company's intangible assets (including patient lists and
goodwill) for $675,000 consisting of $600,000 in restricted common stock of UCI,
the payment of $15,000 in cash immediately at closing, and the execution of an
interest-bearing promissory note for $60,000, maturing approximately four months
after closing. UCI entered into an agreement with the Company's shareholders to
lease the present office space for a term of fifteen years at an annual rate of
$46,620. As a condition of the transaction, the stockholders, operating as
Emergency Medicine Specialists, P.A., entered into a two-year physician services
agreement to provide, on average, sixty hours per week of physician services.
Page 12 of 21
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UCI Medical Affiliates, Inc.
Pro Forma Combining Balance Sheet
September 30, 1995
(Unaudited)
The following pro forma combining balance sheet is based on the individual
balance sheets of UCI Medical Affiliates, Inc. as of September 30, 1995 per the
Company's Annual Report and Wateree Emergency Specialists, P.A. as of December
31, 1995 appearing in item 7a of this filing. The information has been prepared
to reflect the acquisition by UCI Medical Affiliates, Inc. of Wateree Emergency
Specialists, P.A. after giving effect to the pro forma adjustments described in
Note 1. This statement should be read in conjunction with each entity's
financial statements and footnotes.
<TABLE>
<CAPTION>
UCI Medical Wateree
Affiliates, Inc. Emergency Pro Forma Pro Forma
Specialists, P.A. Adjustments Combined
------------------ -------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 76,513 $ (15,000)(a) $ 61,513
Accounts receivable - net 2,343,325 14,322 2,357,647
Medical supplies inventory 265,068 265,068
Deferred taxes 491,543 491,543
Prepaids and other assets 282,060 282,060
Goodwill 3,578,371 643,527(a) 4,178,996
(42,902)(b)
Property, plant and equipment, net
2,795,384 17,151 2,812,535
Deferred taxes 120,639 120,639
Other assets 262,768 3,479 (3,479)(a) 262,768
============ ============ ============ ============
Total assets $ 10,215,671 $ 34,952 $ 582,146 $ 10,832,769
============ ============ ============ ============
LIABILITIES AND CAPITAL
Current portion - long-term debt
$ 1,244,603 $ 6,063 $ 53,937(a) $ 1,304,603
Accounts payable 1,652,792 14,180 86,000(d) 1,738,792
(14,180)(a)
Accrued payroll 498,791 498,791
Other accrued liabilities 445,362 5,522 (5,522)(a) 446,491
1,129(c)
Long-term debt, net of current 3,121,098 3,121,098
Common stock 175,408 3,000 (3,000)(a) 181,667
6,259(a)
Paid-in capital 9,694,256 593,741(a) 10,287,997
Accumulated earnings
(deficit) (6,616,639) 6,187 (6,187)(a) (6,746,670)
(130,031)(e)
============ ============ ============ ============
Total liabilities and capital $ 10,215,671 $ 34,952 $ 582,146 $ 10,832,769
============ ============ ============ ============
</TABLE>
Page 13 of 21
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UCI Medical Affiliates, Inc.
Notes to Pro Forma Combining Balance Sheet
September 30, 1995
(Unaudited)
1. The pro forma combining balance sheet has been prepared to reflect the
acquisition of Wateree Emergency Specialists, P.A. by UCI Medical Affiliates,
Inc. for an aggregate price of $675,000. The purchase occurred on June 11, 1996.
The combining balance sheet reflects the balances of UCI at September 30, 1995
and Wateree Emergency Specialists, P.A. at December 31, 1995. Pro forma
adjustments are made to reflect:
(a.) The assets acquired consisted of: The purchase price consisted of:
<TABLE>
<CAPTION>
<S> <C> <C>
$ 14,322 Accounts receivable $ 6,259 Common stock
17,151 Furniture, equipment 593,741 Additional paid-in-capital
643,527 Goodwill 60,000 Note payable
15,000 Cash paid at closing
=========== ===========
$675,000 $ 675,000
=========== ===========
</TABLE>
Issuance of restricted common shares valued at $600,000 at
estimated per share value of $3.47.
Certain deposits ($500) and amounts due from others ($2,979) were not
acquired. Accounts payable ($14,180), payroll taxes payable ($5,522) and
shareholder note payable ($6,063) were not assumed.
(b.) Excess of acquisition cost over the fair values of net assets acquired
(goodwill) less one year's amortization. ($643,527 goodwill less $42,902
amortization)
(c.) Accrued interest for the four month term of the note payable at 9%
(d.) Net change in fees for physician services is $86,000 annually, based on
the physician's service agreement, and is recorded as an accrued payable.
(e.) Effects of pro forma adjustments on statement of operations.
Page 14 if 21
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UCI Medical Affiliates, Inc.
Pro Forma Statement of Operations and Accumulated Deficit
for the year ended September 30, 1995
(Unaudited)
The following pro forma combining statement is based on the individual
statements of operations and accumulated deficit of UCI Medical Affiliates, Inc.
as of September 30, 1995 per the Company's Annual Report and Wateree Emergency
Specialists, P.A. as of December 31, 1995 appearing in item 7a of this filing.
The information has been prepared to reflect the acquisition by UCI Medical
Affiliates, Inc. of Wateree Emergency Specialists, P.A. after giving effect to
the pro forma adjustments described in Note 1. This statement should be read in
conjunction with each entity's financial statements and footnotes.
<TABLE>
<CAPTION>
UCI Medical Wateree Emergency Pro Forma Pro Forma
Affiliates, Inc. Specialists, P.A Adjustments Combined
----------------- ------------------ ----------- --------------
<S> <C> <C> <C> <C>
Revenue $ 17,987,147 $ 674,195 $ $ 18,661,342
Operating costs 18,180,080 622,491 86,000(a) 18,888,571
------------ ------------ ------------ ------------
Operating margin (192,933) 51,704 (86,000) (227,229)
General and administrative expenses 87,616 52,884 140,500
Depreciation and amortization 579,224 7,080 42,902(b) 629,206
------------ ------------ ------------ ------------
Loss from operations (859,773) (8,260) (128,902) (996,935)
Interest expense, net 505,459 462 1,129(c) 507,050
Gain on equipment 5,493 5,493
------------ ------------ ------------ ------------
Loss before income tax (1,359,739) (8,722) (130,031) (1,498,492)
Income tax expense (benefit) --
------------ ------------ ------------ ------------
Net (loss) income (1,359,739) (8,722) (130,031) (1,498,492)
Accumulated deficit - beginning of year
(5,256,896) (5,248,178)
------------ ------------ ------------ ------------
Accumulated deficit - end of year
$ (6,616,639) $ $ $ (6,746,670)
============ ============ ============ ============
Earnings per common and common equivalent share:
Net income $ (.43) (d) $ (.45)
============ ============ ============ ============
Weighted average shares of common stock outstanding
3,136,544 3,309,132
============ ============ ============ ============
</TABLE>
Page 15 of 21
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UCI Medical Affiliates, Inc.
Note to Pro Forma Combining Statement of Operations and Accumulated Deficit
for the year ended September 30, 1995
(Unaudited)
1. The above statement gives effect to the following pro forma adjustments
necessary to reflect the acquisition outlined in Note 1 to the pro forma balance
sheet:
(a.) Net change in physician salary based on employment contract
between the Wateree Emergency Specialists and UCI Medical
Affiliates, Inc.
(b.) Addition for amortization of goodwill on a straight line basis
over 15 years.
(c.) Accrued interest on note payable at 9% for four month loan term.
(d.) Not applicable; Wateree Emergency Specialists, P.A. was not
required to, and did not, compute earnings per share.
Page 16 of 21
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UCI Medical Affiliates, Inc.
Pro Forma Combining Balance Sheet
June 30, 1996
(Unaudited)
The following pro forma combining balance sheet is based on the individual
balance sheets of UCI Medical Affiliates, Inc. as of June 30, 1996 per the
Company's Form 10QSB and Wateree Emergency Specialists, P.A. as of December 31,
1995 appearing in Item 7(a) of this filing. The information has been prepared to
reflect the acquisition by UCI Medical Affiliates, Inc. of Wateree Emergency
Specialists, P.A. after giving effect to the pro forma adjustments described in
Note 1. This statement should be read in conjunction with each entity's
financial statements and footnotes.
<TABLE>
<CAPTION>
Wateree
UCI Medical Emergency Pro Forma Pro Forma
Affiliates, Inc. Specialists, P.A. Adjustments Combined
------------------ ------------- --------------- --------------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ - $ - $ $ -
Accounts receivable - net 3,719,712 14,322 3,734,034
Medical supplies inventory 267,356 267,356
Deferred taxes 301,146 301,146
Prepaids and other assets 393,056 393,056
Goodwill 5,901,923 643,527 (a) 6,513,188
(32,262) (b)
Property, plant and equipment, net
3,001,552 17,151 3,018,703
Deferred taxes 486,036 486,036
Other assets 271,013 3,479 (3,479) (a) 271,013
=============== ============= ============== ================
Total assets $ 14,341,794 $ 34,952 $ 607,786 $ 14,984,532
=============== ============= ============== ================
LIABILITIES AND CAPITAL
Current portion - long-term debt
$ 1,720,302 $ 6,063 $ 53,937 (a) $ 1,780,302
Accounts payable 1,419,726 14,180 (14,180) (a) 1,499,226
15,000 (a)
64,500 (d)
Accrued payroll 225,933 (b) 225,933
Other accrued liabilities 260,712 5,522 (5,522) (a) 261,841
1,129 (c)
Long-term debt, net of current
2,910,388 2,910,388
(3,000) (b)
Common stock 240,375 3,000 6,259 (a) 246,634
Paid-in capital 13,732,333 593,741 (a) 14,326,074
Accumulated earnings (deficit)
(6,167,975) 6,187 (97,891) (e) (6,265,866)
(6,187) (a)
=============== ============= ============== ============
Total liabilities and
capital
$ 14,341,794 $ 34,952 $ (607,786) $ 14,984,532
=============== ============= ============== =============
</TABLE>
Page 17 of 21
<PAGE>
UCI Medical Affiliates, Inc.
Notes to Pro Forma Combining Balance Sheet
June 30, 1996
(Unaudited)
1. The pro forma combining balance sheet has been prepared to reflect the
acquisition of Wateree Emergency Specialists, P.A. by UCI Medical Affiliates,
Inc. for an aggregate price of $675,000. The purchase occurred on June 11, 1996.
The combining balance sheet reflects the balances of UCI at June 30, 1996 and
Wateree Emergency Specialists, P.A. at December 31, 1995. Pro forma adjustments
are made to reflect:
<TABLE>
<CAPTION>
(a.) The assets acquired consisted of: The purchase price consisted of:
<S> <C> <C> <C>
$ 6,259 Common stock
$ 14,322 Accounts receivable 593,741 Additional paid-in-capital
17,151 Furniture , equipment 60,000 Note payable
643,527 Goodwill 15,000 Cash paid at closing
================ ================
$ 675,000 $ 675,000
================ ================
</TABLE>
Issuance of restricted common shares valued at $600,000 at
estimated per share value of $3.47.
Certain deposits ($500) and amounts due from others ($2,979) were
not acquired. Accounts payable ($14,180), payroll taxes payable
($5,522) and shareholder note payable ($6,063) were not assumed.
(b.) Excess of acquisition cost over the fair values of net assets
acquired (goodwill) less nine month's amortization. ($643,527
goodwill less $32,262 amortization)
(c.) Accrued interest for four month term of the note payable at 9%.
(d.) Net change in fee for physician services of $86,000 annually based
on service agreement for nine months recorded as an accrued
payable.
(e.) Effects of pro forma adjustments on statement of operations.
Page 18 of 21
<PAGE>
UCI Medical Affiliates, Inc.
Pro Forma Statement of Operations and Accumulated Deficit
for the nine months ended June 30, 1996
(Unaudited)
The following pro forma combining statement is based on the individual
statements of operations and accumulated deficit of UCI Medical Affiliates, Inc.
as of June 30, 1996 per the Company's Form 10QSB and Wateree Emergency
Specialists, P.A. as of December 31, 1995 appearing in Item 7(a) of this filing.
The information has been prepared to reflect the acquisition by UCI Medical
Affiliates, Inc. of Wateree Emergency Specialists, P.A. after giving effect to
the pro forma adjustments described in Note 1. Information for the nine months
ended June 30, 1996 for Wateree Emergency Specialists, P.A. is estimated since
Wateree Emergency Specialists, P.A. did not maintain its records on a basis
consistent with UCI Medical Affiliates, Inc. This statement should be read in
conjunction with each entity's financial statements and footnotes.
<TABLE>
<CAPTION>
UCI Wateree
Medical Emergency Pro Forma Pro Forma
Affiliates, Ic. Specialists, P.A. Adjustments Combined
-------------- ----------------- ----------- --------------
<S> <C> <C> <C> <C>
Revenue $ 17,003,582 $ 505,647 $ $ 17,509,229
Operating costs 15,513,107 466,869 64,500 (a) 16,044,476
-------------- ------------- --------------- --------------
Operating margin 1,490,475 38,778 (64,500) 1,464,753
General and administrative
expenses 90,364 39,663 32,262 (b) 162,289
Depreciation and amortization 687,819 5,310 693,129
-------------- ------------- --------------- --------------
Income from operations 712,292 (6,195) (96,762) 609,335
Interest expense, net 427,327 347 1,129 (c) 428,803
Gain on equipment (2,105) (2,105)
-------------- ------------- --------------- --------------
Income before income tax 287,070 (6,542) (97,891) 182,637
Income tax benefit 161,594 161,594
-------------- ------------- --------------- --------------
Net income 448,664 (6,542) (97,891) 344,231
Accumulated deficit - beginning of year
(6,616,639) (6,610,097)
-------------- ------------- --------------- --------------
Accumulated deficit - end of year
$ (6,167,975) $ (6,265,866)
============== ============= =============== ==============
Earnings per common and common equivalent share:
Net income $ .11 (d) .08
============== ============= =============== ==============
Weighted average shares of common stock outstanding
4,121,683 4,294,271
============== ============= =============== ==============
</TABLE>
Page 19 of 21
<PAGE>
UCI Medical Affiliates, Inc.
Note to Pro Forma Combining Statement of Operations and Accumulated Deficit
for the nine months ended June 30, 1996
(Unaudited)
1. The above statement gives effect to the following pro forma adjustments
necessary to reflect the acquisition outlined in Note 1 to the pro forma balance
sheet:
(a.) Net change in physician fees based on employment agreement between
Wateree Emergency Specialists , and UCI Medical Affiliates, Inc.
(b.) Addition for nine months amortization of goodwill on a straight
line basis over 15 years.
(c.) Accrued interest on note payable at 9% for four months.
(d.) Not applicable; Wateree Emergency Specialists, P.A. was not
required to, and did not, compute earnings per share.
Page 20 of 21
<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 hereunto duly authorized.
UCI Medical Affiliates, Inc.
(Registrant)
/s/ M.F. McFarland, III, M.D. /s/ Jerry F. Wells, Jr.
President, Chief Executive Officer and Vice President of Finance and
Chairman of the Board Chief Financial Officer
Date: August 16, 1996
Page 21 of 21
