UNAUDITED PRO FORMA COMBINED BALANCE SHEET OF
SURGICARE, INC. AND HEALTHFIRST MEMORIAL VILLAGE SURGERY CENTER, LTD.
September 30, 2000
The following unaudited pro forma combined balance sheet combines the
historical consolidated balance sheets of Surgicare, Inc and Healthfirst
Memorial Village Surgery Center, Ltd. (HFMVSC, Ltd.) giving effect to the
acquisition by Surgicare, Inc. of 60% of the net assets of HFMVSC, Ltd. which
will be accounted for as a purchase, as if the acquisition on October 20, 2000,
had been effective September 30, 2000, and after giving effect to the pro forma
adjustments described in the notes to the pro forma combined financial
statements. The information presented below should be read together with the
historical consolidated financial statements of Surgicare, Inc. and HFMVSC,
Ltd., including the related notes. The pro forma financial data are not
necessarily indicative of the financial position that actually would have
occurred had the acquisition been completed on September 30, 2000, or that may
be obtained in the future.
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UNAUDITED PRO FORMA COMBINED BALANCE SHEET OF
SURGICARE, INC. AND HEALTHFIRST MEMORIAL VILLAGE SURGERY CENTER, LTD.
September 30, 2000
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Surgicare, Inc. HFMVSC, Ltd. Pro Forma Pro Forma
Historical Historical Adjustments Combined
ASSETS
Current Assets
Cash and cash equivalents $ 123,289 $ 66,289 $ 189,578
Accounts receivable 2,562,258 544,742 3,107,000
Other assets 218,742 383,972 602,714
Total Current Assets 2,904,289 995,003 3,899,292
Net Property and Equipment 665,596 982,611 961,000 (a) 2,609,207
Goodwill, net 157,762 7,148,425 (a) 7,306,187
Other Assets 11,119 (11,119) (a)
$ 3,738,766 $ 1,977,614 $ 8,098,306 $ 13,814,686
LIABILITIES
Current Liabilities
Short-term debt and capital
leases $ 529,812 $ 778,744 $ 750,000 (a) $ 2,058,556
Accounts payable and
accrued expenses 333,031 329,337 662,368
Federal income tax payable 657,517 657,517
Deferred federal income tax 678,899 678,899
Total Current Liabilities 2,199,259 1,108,081 750,000 4,057,340
Minority Interest in
Partnership 74,462 (a) 74,462
Long-Term Debt and Capital
Leases 24,334 683,377 3,740,000 4,447,711
2,223,593 1,791,458 4,564,462 8,579,513
STOCKHOLDERS' EQUITY
Preferred Stock 1,450 1,450
Common Stock 62,983 6,833 (a) 69,816
Additional Paid-in Capital 922,696 3,713,167 (a) 4,635,863
Retained Earnings 786,224 786,224
Partners' Capital 186,156 (186,156) (a)
Less: Shareholder receivable (258,180 (258,180)
1,515,173 186,156 3,533,844 5,235,173
$ 3,738,766 $ 1,977,614 $ 8,098,306 $ 13,814,686
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UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS OF
SURGICARE, INC. AND HEALTHFIRST MEMORIAL SURGERY CENTER, LTD.
The following unaudited pro forma combined statements of operations combine
the historical consolidated statements of operations of Surgicare, Inc. and
Healthfirst Memorial Village Surgery Center, Ltd. (HFMVSC, Ltd.), giving effect
to the acquisition by Surgicare, Inc. on October 20, 2000, of 60% of the net
assets of HFMVSC, Ltd., which will be accounted for as a purchase, as if the
acquisition had been effective as of the beginning of the earliest period
presented and after giving effect to the pro forma adjustments described in the
notes to the pro forma combined financial statements of Surgicare, Inc. and
HFMVSC, Ltd., including the related notes. The pro forma financial data are not
necessarily indicative of the financial results that actually would have
occurred had the acquisition been completed on the dates indicated or that may
be obtained in the future.
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UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS OF
SURGICARE, INC. AND HEALTHFIRST MEMORIAL VILLAGE SURGERY CENTER, LTD.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
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Surgicare, Inc. HFMVSC, Ltd. Pro Forma Pro Forma
Historical Historical Adjustments Combined
Revenue $ 3,856,747 $ 2,999,154 $ 6,855,901
Direct Cost of Revenue 1,184,370 1,399,745 2,584,115
General and Administrative 897,330 1,523,368 $ 357,421 (d) 2,595,090
142,971 (d)
(326,000) (b)
Interest expense 131,772 345,169 (c) 476,941
Earnings (Loss) Before
Minority Interest and Income
Tax Expense 1,775,047 (55,731) (519,561) 1,199,755
Minority interest in earnings of
partnership (27,778) (a) (27,778)
Earnings (Loss) Before Income
Tax 1,775,047 (55,731) (547,339) 1,171,977
Income tax (expense)
benefit (704,705) 235,198 (e) (469,507)
Net Earnings (Loss) $ 1,070,342 $ (55,731) $ (312,141) $ 702,470
Earnings per share - basic and
diluted $ .01 $ .01
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UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS OF
SURGICARE, INC. AND HEALTHFIRST MEMORIAL VILLAGE SURGERY CENTER, LTD.
FOR THE YEAR ENDED DECEMBER 31, 1999
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Surgicare, Inc. HFMVSC, Ltd. Pro Forma Pro Forma
Historical Historical Adjustments Combined
Revenue $ 4,216,660 $ 4,783,471 $ 9,000,131
Direct Cost of Revenue 1,208,003 1,767,206 2,975,209
General and Administrative 1,146,680 1,779,020 $ 476,562 (d) 3,139,891
190,629 (d)
(453,000) (b)
Interest expense 49,915 210,675 460,225 (c) 720,815
Other (income) expense (24,458) 14,135 (10,323)
Earnings Before Minority
Interest and Income Tax
Expense 1,836,520 1,012,435 (674,416) 2,174,539
Minority interest in earnings of
partnership (470,236) (a) (470,236)
Earnings (Loss) Before Income
Tax 1,836,520 1,012,435 (1,144,652) 1,704,303
Income tax expense (624,417) 51,564 (e) (572,853)
Net Earnings $ 1,212,103 $ 1,012,435 $ (1,093,088) $ 1,131,450
Earnings per share - basic and
diluted $ .08 $ .06
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NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS OF
SURGICARE, INC. AND HEALTHFIRST MEMORIAL VILLAGE SURGERY CENTER, LTD.
1. Pro Forma Adjustments
(a) The acquisition of 60% of the net assets of Healthfirst Memorial
Village Surgery Center, Ltd. will be accounted for as a purchase and,
accordingly, the adjustments to assets, liabilities and equity reflect
(1) adjustment of fixed assets to their estimated fair market value of
$1,943,611 and recording goodwill of $7,148,425, (2) various
borrowings of $4,490,000 to obtain cash for the purchase price, (3)
issuance of 1,366,649 shares of common stock valued at $3,720,000, (4)
prepaid transaction costs of $11,119, and (5) the 40% minority
interest in the net assets and earnings of HFMVSC, Ltd.
(b) Reflects the cancellation of management and shared service expenses
contracts at the date of acquisition.
(c) Interest expense will increase due to increased borrowings to fund the
acquisition.
(d) Depreciation and amortization expense will increase due to increased
fixed asset cost and amortization of goodwill over 15 years.
(e) Reflects the change in earnings before income tax for Surgicare, Inc.
2. Pro Forma Net Earnings Per Share
The pro forma basic and diluted earnings per share are based on the
weighted average number of shares of pro forma SurgiCare common stock
outstanding during each period.
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Nine Months Year
Ended Ended
September 30, December 31,
2000 1999
Earnings Per Share
Pro forma net earnings $ 702,470 $ 1,131,450
Less preferred dividends (522,000) (326,000)
Pro forma net earnings available for common
shareholders $ 180,470 $ 805,450
Weighted average shares outstanding 13,963,306 13,122,071
Pro forma earnings per share - basic and diluted $ .01 $ .06
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