<PAGE>
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): June 20, 1995
-------------
ROTECH MEDICAL CORPORATION
--------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED ON ITS CHARTER)
Florida 59-2115892
------------------------------ -------------------
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4506 L.B. McLeod Road, Suite F, Orlando, Florida 32811
------------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (407) 841-2115
--------------------------------------------------- --------------
Not Applicable
--------------
(former name or former address, if changed since last report)
<PAGE>
The undersigned Registrant hereby amends the following item, financial
statements, exhibits or other portions of its Current Report on Form 8-K, filed
June 20, 1995, relating to the June 5, 1995 acquisition of substantially all of
the net assets of Marshall Bell, Ltd, a Texas general partnership, (hereinafter
referred to as "Marshall Bell" or "Seller") for $11.3 million cash and 146,940
shares of its restricted common stock, valued at $2.8 million. Marshall Bell
provides home health care products and services through its locations in Texas,
Louisiana, Mississippi and Arkansas. The Registrant intends to continue the
business as acquired.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
----------------------------------------------------------------------------
(a) 1. Financial Statemements Business Acquired.
-------------------------------------------------
Marshall Bell, Ltd.
-------------------
Report of Independent Certified Public Accountants
Balance Sheet at December 31, 1994
Statement of Income for the Year Ended December 31, 1994
Statement of Partners' Capital for the Year Ended December 31, 1994
Statement of Cash Flows for the Year Ended December 31, 1994
Notes to Financial Statements
Interim Balance Sheet at April 30, 1995 (unaudited)
Interim Statements of Income for the Four Months Ended April 30, 1995
and 1994 (unaudited)
Interim Statement of Partners' Capital for the Four Months Ended
April 30, 1995 (unaudited)
Interim Statements of Cash Flows for the Four Months Ended April 30,
1995 and 1994 (unaudited)
Notes to Interim Financial Statements as of April 30, 1995 and 1994
(unaudited)
<PAGE>
(b) 1. Pro Forma Financial Information.
----------------------------------------
Pro Forma Condensed Combined Financial Statements at July 31, 1994
(unaudited)
Pro Forma Condensed Combined Interim Financial Statements at April
30, 1995 (unaudited)
<PAGE>
Report of Independent Certified Public Accountants
--------------------------------------------------------------------------------
Partners
Marshall Bell, Ltd.
We have audited the accompanying balance sheet of Marshall Bell, Ltd.
(the Partnership) as of December 31, 1994, and the related statements of
income, partners' capital, and cash flows for the year then ended.
These financial statements are the responsibility of the Partnership'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 the
Partnership at December 31, 1994, and the results of its operations and
its cash flows for the year then ended in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
Orlando, Florida
August 9, 1995
<PAGE>
Marshall Bell, Ltd.
Balance Sheet
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31
1994
-----------
<S> <C>
ASSETS
Current Assets:
Cash $ 2,000
Accounts receivable:
Trade, less allowance for contractual
adjustments and doubtful accounts
of $100,000 577,697
Other 75,535
Inventories 325,996
---------
Total Current Assets 981,228
Other assets 1,330
Property and Equipment, less accumulated
depreciation 2,115,286
---------
Total Assets $3,097,844
==========
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable $ 807,561
Accrued expenses and other liabilties 70,031
Notes payable 1,009,560
----------
Total Current Liabilities 1,887,152
Long-term debt, less current portion 319,533
Partners' Capital:
General Partners 891,159
----------
891,159
----------
Total Liabilities and Partners' Capital $3,097,844
==========
</TABLE>
See accompanying notes to financial statements.
-----------------------------------------------
<PAGE>
Marshall Bell, Ltd.
Statement of Income
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
1994
-----------
<S> <C>
Operating revenue $5,134,779
Cost and expenses:
Cost of revenue 923,378
Selling, general and administrative 2,951,350
Depreciation 591,029
Interest 77,532
----------
4,543,289
----------
Net Income $ 591,490
==========
</TABLE>
See accompanying notes to financial statements.
-----------------------------------------------
<PAGE>
Marshall Bell, Ltd.
Statement of Partners' Capital
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GENERAL
PARTNERS
----------
<S> <C>
Balance at January 1, 1994 $ 560,382
Partners' Draws (260,713)
Net income 591,490
----------
Balance at December 31, 1994 $ 891,159
==========
</TABLE>
See accompanying notes to financial statements
----------------------------------------------
<PAGE>
Marshall Bell, Ltd.
Statement of Cash Flows
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
1994
-----------
<S> <C>
OPERATING ACTIVITIES
Net income $ 591,490
Adjustments to reconcile net income to net
cash provided by operations:
Depreciation 591,029
Changes in operating assets and liabilities:
Increase in trade accounts receivable (106,647)
Increase in other receivables (70,035)
Increase in inventories (151,158)
Increase in accounts payable 341,004
Decrease in accrued expenses and other liabilities (2,000)
----------
Net cash provided by operating activities 1,193,683
INVESTING ACTIVITIES
Purchases of property and equipment (1,688,634)
----------
Net cash used in investing activities (1,688,634)
FINANCING ACTIVITIES
Proceeds from notes payable 1,341,769
Payments on notes payable (590,351)
Partners' draws (260,713)
----------
Net cash provided by financing activities 490,705
----------
Decrease in cash (4,246)
Cash at Beginning of Period 6,246
----------
Cash at End of Period $ 2,000
==========
Supplemental disclosure of cash flow information:
Cash paid during the year for interest $ 75,000
==========
</TABLE>
See accompanying notes to financial statements.
-----------------------------------------------
<PAGE>
Marshall Bell, Ltd.
Notes to Financial Statements - December 31, 1994
-------------------------------------------------------------------------------
1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
Marshall Bell, Ltd. (the "Partnership") was established on January 1, 1992.
The Partnership markets and provides home health care products and services and
rents home care equipment to patients, through its ten locations in Texas,
Louisiana and Arkansas. These products and services, which are typically
prescribed by a physician, include home health care products (such as
respiratory therapy equipment and convalescent medical equipment).
REVENUE RECOGNITION
Revenues are reported on the accrual basis in the period in which services
are provided. Operating revenue represents the estimated net realizable
amounts from patients, third-party payors, and others for services rendered.
The Company's accounts receivable consists primarily of amounts due from
federal and state third party reimbursement programs and third party payors.
Rental income under short-term leasing arrangements is recognized on a
straight-line basis over the term of the lease and approximated $3.4 million in
1994. Approximately 39% of net operating revenue was derived under
federal and state third-party reimbursement programs in 1994.
INVENTORIES
Inventories consist principally of durable medical equipment and medical
supplies and are stated at the lower of cost (first-in, first-out method) or
market.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost. Depreciation is provided on
accelerated and straight-line methods over the estimated useful lives of the
assets (generally 3 to 31.5 years). Amortization of leasehold improvements
is included in depreciation.
<PAGE>
Marshall Bell, Ltd.
Notes to Financial Statements - December 31, 1994
-------------------------------------------------------------------------------
1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
INCOME TAXES
No provision for income taxes is made in the Partnership's financial
statements since, as a partnership, all taxable income and losses will be
allocated to the partners for inclusion in their respective tax returns.
2. PROPERTY AND EQUIPMENT
Property and equipment at December 31, 1994 consists of the following:
<TABLE>
<S> <C>
Rental equipment $2,388,297
Vehicles 382,532
Building 366,037
Furniture and equipment 125,711
Land 30,749
----------
3,293,326
Less accumulated depreciation 1,178,040
----------
$2,115,286
==========
3. NOTES PAYABLE
Current notes payable at December 31, 1994 consists of the following:
<S> <C>
Line of credit $ 262,518
Bank notes 623,840
Other notes 123,202
----------
$1,009,560
==========
</TABLE>
On August 10, 1994 the Partnership secured a $300,010 line of credit due on
February 28, 1995. Interest was payable at 11.00%. The line of credit was
secured by the Partnership's inventory, accounts receivable and the assignment
of life insurance.
<PAGE>
Marshall Bell, Ltd.
Notes to Financial Statements - December 31, 1994
-------------------------------------------------------------------------------
3. NOTES PAYABLE (CONTINUED)
The bank notes and other notes have varying interest rates from 7.25% to
11.00% and are due from October 1995 to December 1997. These notes are secured
by various vehicles, property, equipment, inventory and accounts receivable with
an approximate net book value of approximately $2.7 million.
Long-term debt consists of the following:
<TABLE>
<S> <C>
Bank notes $ 833,297
Line of credit 262,518
Other 233,278
----------
1,329,093
Less current portion 1,009,560
----------
Long-term debt $ 319,533
==========
The annual maturities of the loans are as follows:
Due in 1994 $ 999,560
Due in 1995 296,731
Due in 1996 32,802
----------
$1,329,093
==========
4. LEASE COMMITMENTS
Rental expense approximated $82,248 in 1994.
Future minimum rental commitments under operating leases, primarily for
buildings, are as follows:
For The Years Ending December 31
--------------------------------
1995 $129,631
1996 126,413
1997 83,925
1998 31,931
--------
$371,900
========
</TABLE>
<PAGE>
Marshall Bell, Ltd.
Notes to Financial Statements - December 31, 1994
-------------------------------------------------
5. RELATED PARTY TRANSACTIONS
The Partnership's general partners are also general partners in an Arkansas
Partnership. The Partnership sold certain medical products to
the Arkansas Partnership. At December 31, 1994 the Partnership has a
$72,000 receivable from the Arkansas partnership. During the year, the
Partnership recorded approximately $2,300 of income related to its transactions
with the Arkansas Partnership.
Certain of the Partnership's general partners were also general partners in a
Louisiana Partnership. The Partnership advanced funds to the Louisiana
Partnership. The Partnership had no receivable from or payable to the Louisiana
Partnership at December 31, 1994. During the year, the Partnership advanced
approximately $130,000 cash to the Louisiana Partnership.
6. EMPLOYEE BENEFIT PLAN
The Partnership maintains a Profit Sharing Plan ("Plan") covering eligible
employees who have completed twelve months of service and have been credited
with 1,000 hours of service during the eligibility period. Each year the
Partnership may make discretionary contributions to the Plan. Employees do not
contribute to the Plan.
The Partnership expense under the Plan was approximately $10,000 in 1994.
7. SUBSEQUENT EVENT
Effective January 1, 1995, the Partnership purchased substantially all of
the net assets of a two-location Mississippi-based home health care company for
approximately $992,000 cash.
Effective June 5, 1995, the Partnership sold substantially all of its net
assets and granted a covenant not to compete to a Florida-based provider of
home health care services for approximately $11.3 million cash and 146,940
shares of its restricted common stock, valued at approximately $2.8 million.
<PAGE>
Marshall Bell, Ltd.
Interim Balance Sheet (Unaudited)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
APRIL 30
1995
--------
<S> <C>
ASSETS
Current Assets:
Cash $ 378,040
Accounts receivable:
Trade, less allowance for contractual
adjustments and doubtful accounts 1,155,990
Other 28,907
Inventories 365,198
Prepaid expenses and other 9,865
----------
Total Current Assets 1,938,000
Intangible assets, less accumulated
amortization 345,634
Other assets 1,330
Property and Equipment, less accumulated
depreciation 3,235,183
----------
Total Assets $5,520,147
==========
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities:
Accounts payable, accrued expenses and
other liabilities $1,262,428
Notes payable 1,587,679
----------
Total Current Liabilities 2,850,107
Long-term debt, less current portion 1,341,503
Partners' Capital:
General partners 1,328,537
----------
1,328,537
----------
Total Liabilities and Partners' Capital $5,520,147
==========
</TABLE>
See accompanying notes to interm financial statements (unaudited).
----------------------------------------------------------------
<PAGE>
Marshall Bell, Ltd.
Interim Statements of Income (Unaudited)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOUR MONTHS FOUR MONTHS
ENDED ENDED
APRIL 30, 1995 APRIL 30, 1994
-------------- --------------
<S> <C> <C>
Operating revenue $2,959,454 $1,341,338
Cost and expenses:
Cost of revenue 561,313 301,129
Selling, general and administrative 1,193,261 734,011
Depreciation and amortization 273,211 105,750
Interest 65,255 9,060
---------- ----------
2,093,040 1,149,950
---------- ----------
Net Income $ 866,414 $ 191,388
========== ==========
</TABLE>
See accompanying notes to interim financial statements (unaudited).
-------------------------------------------------------------------
<PAGE>
Marshall Bell, Ltd.
Interim Statement of Partners' Capital (Unaudited)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GENERAL
PARTNERS
----------
<S> <C>
Balance at January 1, 1995 $ 891,159
Partners' draws (429,036)
Net income 866,414
----------
Balance at April 30, 1995 $1,328,537
==========
</TABLE>
See accompanying notes to interim financial statements (unaudited).
-------------------------------------------------------------------
<PAGE>
Marshall Bell, Ltd.
Interim Statements of Cash Flows (Unaudited)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOUR MONTHS FOUR MONTHS
ENDED ENDED
APRIL 30, 1995 APRIL 30, 1994
-------------- --------------
<S> <C> <C>
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES $ 776,310 $ 145,165
INVESTING ACTIVITIES
Purchases of property and equipment (717,538) (238,775)
Payment for acquisition (853,785) --
---------- ----------
Net cash used in investing activities (1,571,323) (238,775)
FINANCING ACTIVITIES
Proceeds from notes payable, net 1,600,089 225,567
Partners' draws (429,036) (45,176)
---------- ----------
Net cash provided by financing activities 1,171,053 180,391
---------- ----------
Increase in cash 376,040 86,781
Cash at Beginning of Period 2,000 6,246
---------- ----------
Cash at End of Period $ 378,040 $ 93,027
========== ==========
</TABLE>
See accompanying notes to interim financial statements (unaudited).
-------------------------------------------------------------------
<PAGE>
Marshall Bell, Ltd.
Notes to Interim Financial Statements - April 30, 1995 and 1994
(Unaudited)
--------------------------------------------------------------------------------
1. BASIS OF REPORTING
The interim balance sheet as of April 30, 1995, the interim statements of income
and cash flows for the four months ended April 30, 1995 and 1994 and the interim
statement of partners' capital for the four months ended April 30, 1995 are
unaudited. In the opinion of management, these statements have been prepared on
the same basis as the audited financial statements and include all adjustments,
consisting only of normal recurring accruals, necessary for the fair statement
of the results of the interim periods.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These interim financial statements should be
read in conjunction with the financial statements and notes thereto included in
the Partnership's audited financial statements as of and for the year ended
December 31, 1994. The results of operations for the interim period are not
necessarily indicative of the results which may be expected for an entire year.
2. SUBSEQUENT EVENT
Effective June 5, 1995, the Partnership sold substantially all of its net
assets and granted a covenant not to compete to a Florida-based provider of
home health care services for approximately $11.3 million cash and 146,940
shares of its restricted common stock, valued at approximately $2.8 million.
See accompanying notes to interim financial statements (unaudited).
-------------------------------------------------------------------
<PAGE>
Pro Forma Condensed Combined Financial Statements (Unaudited)
--------------------------------------------------------------------------------
The pro forma condensed combined financial statements for the year ended
July 31, 1994 have been prepared to illustrate the estimated combined effects of
the Agreement of Purchase and Sale (Agreement) between RoTech Medical
Corporation (the Company) and Marshall-Bell, Ltd. ("Marshall Bell"), effective
June 5, 1995
The pro forma condensed combined statement of income was derived by
adjusting the historical statement for the year ended July 31, 1994 of the
Company and the historical statement of income for the year ended December 31,
1994 of Marshall-Bell. Presentation of Marshall Bell's historical statement of
income for a twelve-month period ending within 93 days of July 31, 1994 was not
practicable. The pro forma condensed combined statement of income was prepared
as if the purchase and sale had occurred on August 1, 1993. The pro forma
condensed combined statements of income presented are not necessarily indicative
of the results of operations that might have occurred had the transaction been
completed as of the date specified or of the results of operations of the
Company and its subsidiaries for any future period.
No changes in operating revenue and expenses have been made to reflect
the results of any modification to operations that might have been made had the
Agreement been consummated on the aforesaid assumed effective date for purposes
of presenting pro forma results. Certain supportable payroll costs attributable
to acquired entity's employees whose services would have been terminated upon
the effective date of purchase and sale along with certain expenses for
duplicate locations have been eliminated. The acquisition has been accounted for
in accordance with the purchase method of accounting. The pro forma condensed
combined statements of income include amortization of intangibles as if the
Agreement had been completed on the assumed effective date referred to above.
The pro forma condensed combined financial statements should be read in
conjunction with the audited consolidated financial statements and related
notes thereto included in the Company's July 31, 1994 Form 10-K.
See accompanying notes pro forma condensed combined financial statements
------------------------------------------------------------------------
(unaudited).
------------
<PAGE>
Pro Forma Condensed Combined Statements of Income (Unaudited)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended July 31, 1994
--------------------------------------------------------------
RoTech RoTech
Medical Medical
Corporation Corporation
Consolidated Marshall Combined
Year Ended Bell, Pro Forma Pro Forma
July 31, 1994 Ltd. Adjustments Results
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating revenue $ 71,469 $5,134,779 $76,604,397
Cost and expenses:
Cost of revenue 17,408,548 923,378 18,331,926
Selling, general
and administrative 35,879,483 2,951,350 $(500,000)(a) 38,330,833
Depreciation and amortization 5,338,494 591,029 400,000 (b) 6,329,523
Interest 66,676 77,532 755,688 (c) 899,896
----------- ---------- --------- -----------
58,693,201 4,543,289 655,688 63,892,178
----------- ---------- --------- -----------
Income before income taxes 12,776,417 591,490 (655,688) 12,712,219
Income tax expense 4,664,197 (22,469)(d) 4,641,728
----------- ---------- --------- -----------
Net Income $ 8,112,220 $ 591,490 $(633,219) $ 8,070,491
=========== ========== ========= ===========
Earnings Per Share Data:
Net Income Per Share $0.99 $0.99
Weighted Average Number
of Shares Outstanding 8,147,144 8,147,144
</TABLE>
See accompanying notes to pro forma condensed combined financial statements
---------------------------------------------------------------------------
(unaudited).
------------
<PAGE>
Notes to Pro Forma Condensed Combined Financial Statements (Unaudited)
----------------------------------------------------------------------
(a) Supportable general and administrative expenses relating directly to the
payroll and related expenses of those terminated employees and locations
determined to be duplicated by the Company's existing structure and
therefore would not be needed after the acquisition. Elimination of
estimated non-recurring expenses incurred by Marshall-Bell.
(b) Amortization on intangibles of $10,000,000 (amortized over various lives
from 5 to 25 years) resulting from the excess of the purchase price over
the net assets acquired.
(c) Additional interest expense related to borrowings (or reduced
investments) for $11,300,000 cash paid to acquire Marshall Bell; assumed
borrowed on August 1, 1993, less interest expense pertaining to
liabilities not assumed by the Company. Assumed 6.69% interest rate on
purchase price.
(d) Adjustment to income tax expense for the tax expense relating to the net
income as adjusted for the combined entity. Income taxes are calculated
on the basis that operations of the consolidated company could be
combined as one company for federal income tax purposes at the actual
historical rate for the period. No assurance can be given that these tax
benefits will be realized by the Company.
<PAGE>
Pro Forma Condensed Combined Interim Financial Statements (Unaudited)
---------------------------------------------------------------------
The pro forma condensed combined interim financial statements for the
nine months ended April 30, 1995 have been prepared to illustrate the estimated
combined effects of the Agreement of Purchase and Sale (Agreement) between
RoTech Medical Corporation (the Company) and Marshall-Bell Ltd. ("Marshall
Bell"), effective June 5, 1995. The pro forma condensed combined interim balance
sheet as of April 30, 1995 was derived by adjusting the unaudited historical
balance sheet as of April 30, 1995 of the Company and the unaudited historical
balance sheet as of April 30, 1995 of Marshall-Bell.
The pro forma condensed combined interim statement of income was derived
by adjusting the unaudited historical statement for the nine months ended April
30, 1995 of the Company and the unaudited historical statement of income for the
four months ended April 30, 1995 of Marshall-Bell. The pro forma condensed
combined interim statement of income was prepared as if the purchase and sale
had occurred on August 1, 1994. The pro forma condensed combined statements of
income presented are not necessarily indicative of the results of operations
that might have occurred had the transaction been completed as of the date
specified or of the results of operations of the Company and its subsidiaries
for any future period.
No changes in operating revenue and expenses have been made to reflect
the results of any modification to operations that might have been made had the
Agreement been consummated on the aforesaid assumed effective date for purposes
of presenting pro forma results. Certain supportable payroll costs attributable
to acquired entity's employees whose services would have been terminated upon
the effective date of purchase and sale along with certain expenses for
duplicate locations have been eliminated. The acquisition has been accounted for
in accordance with the purchase method of accounting. The pro forma condensed
combined statements of income include amortization of intangibles as if the
Agreement has been completed on the assumed effective date referred to above.
The pro forma condensed combined interim financial statements should be
read in conjunction with the audited consolidated financial statements and
related notes thereto included in the Company's July 31, 1994 Form 10-K and the
condensed consolidated interim financial statements and the related notes
thereto included in the Company's April 30, 1995 Form 10-Q.
See accompanying notes pro forma condensed combined interim financial statements
--------------------------------------------------------------------------------
(unaudited).
------------
<PAGE>
Pro Forma Condensed Combined Interim Balance Sheets (Unaudited)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
April 30, 1995
------------------------------------------------------------------
RoTech
Medical
RoTech Corporation
Medical Marshall Combined
Corporation Bell, Pro Forma Pro Forma
Consolidated Ltd. Adjustments Results
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash $ 2,388 $ 378,040 $ 2,766,086
Accounts receivable, net 37,016,068 1,155,990 38,172,058
Other accounts receivable 2,902,861 28,907 2,931,768
Inventories 10,483,661 365,198 10,848,859
Prepaid expenses 429,217 9,865 439,082
------------ ----------- ------------ -----------
Total current assets 53,219,853 1,938,000 55,157,853
Intangible assets, net 49,550,697 345,634 $9,654,366 (1) 59,550,697
Other assets 342,940 1,330 344,270
Property and equipment, net 32,670,855 3,235,183 35,906,038
------------ ----------- ------------ -----------
Total assets $135,784,345 $5,520,147 $ 9,654,366 $150,958,858
============ ========== =========== ============
Accounts payable $ 8,709,896 $1,262,428 $ 21,272,324
Notes payable to bank 27,497,000 1,587,679 $11,300,000 (2) 29,084,679
Income taxes payable 1,794,716 1,794,716
------------ ----------- ------------ -----------
Total current liabilities 38,001,612 2,850,107 11,300,000 52,151,719
Deferred income taxes 1,342,650 1,342,650
Long-term debt, less current portion 1,341,503 1,341,503
Partners' capital 1,328,537 (1,328,537)(3) 0
Shareholders' equity:
Common stock 1,960 1,960
Treasury stock, at cost (814,535) (814,535)
Additional paid-in capital 68,493,297 68,493,297
Retained earnings 28,759,361 (317,097)(3) 28,442,264
------------ ----------- ------------ -----------
Total shareholders' equity 96,440,083 0 (317,097) 96,122,986
------------ ----------- ------------ -----------
Total liabilities and
shareholders' equity $135,784,345 $5,520,147 $9,654,366 $150,958,858
============ ========== =========== ============
</TABLE>
See accompanying notes to pro forma condensed combined interim financial
------------------------------------------------------------------------
statements (unaudited).
-----------------------
<PAGE>
Pro Forma Condensed Combined Interim Statements of Income (Unaudited)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
For the Nine Months Ended April 30, 1995
---------------------------------------------------------------------
RoTech
Medical RoTech
Corporation Medical
Consolidated Corporation
Nine Months Marshall Combined
Ended April Bell, Pro Forma Pro Forma
30, 1995 Ltd. Adjustments Results
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating revenue $94,336,199 $2,959,454 $97,295,653
Cost and expenses:
Cost of revenue 25,620,513 561,313 26,181,826
Selling, general
and administrative 47,449,051 1,193,261 $(375,000)(a) 48,267,312
Depreciation and amortization 6,046,955 273,211 300,000 (b) 6,620,166
Interest 763,331 65,255 559,350 (c) 1,387,936
---------- --------- --------- ----------
79,879,850 2,093,040 484,350 82,457,240
---------- --------- --------- ----------
Income before income taxes 14,456,349 866,414 (484,350) 14,838,413
Income tax expense 5,310,000 133,722 (d) 5,443,722
---------- --------- --------- ----------
Net Income $9,146,349 $ 866,414 $(618,072) $9,394,691
========== ========= ========= ==========
Earnings Per Share Data:
Net Income Per Share: $0.92 $0.94
Weighted Average Number
of Shares Outstanding 9,982,972 9,982,972
</TABLE>
See accompanying notes to pro forma condensed combined interim financial
------------------------------------------------------------------------
statements (unaudited).
-----------------------
<PAGE>
NOTES TO PRO FORMA CONDENSED COMBINED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
------------------------------------------------------------------------------
(1) Additional intangibles of $10,000,000 resulting from the excess of the
purchase price over the net assets acquired, less the elimination of the
historical intangibles of Marshall Bell of $345,634. This adjustment
does not contemplate any change to the purchase price for the
differences in the business purchased at June 5, 1995 compared to what
the purchase price may have been as of August 1, 1994.
(2) Purchase price paid in cash ($11,300,000).
(3) Elimination of partners' capital of Marshall Bell in accordance with the
purchase method of accounting.
(a) Supportable general and administrative expenses relating directly to the
payroll and related expenses of those terminated employees and locations
determined to be duplicated by the Company's existing structure and
therefore would not be needed after the acquisition. Elimination of
estimated non-recurring expenses incurred by Marshall Bell.
(b) Amortization on intangibles recorded in the acquisition (amortized over
various lives from 5 to 25 years).
(c) Additional interest expense related to borrowings (or reduced
investments) for cash paid to acquire Marshall Bell; assumed borrowed on
August 1, 1993, less interest expense pertaining to liabilities not
assumed by the Company. Assumed 6% interest rate on purchase price.
(d) Adjustment to income tax expense for the tax expense relating to the net
income as adjusted for the combined entity. Income taxes are calculated
on the basis that operations of the consolidated company could be
combined as one company for federal income tax purposes at the actual
historical rate for the period. No assurance can be given that these tax
benefits will be realized by the Company.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment of Report on Form 8-K to be signed on
its behalf by the undersigned hereunto duly authorized.
RoTech Medical Corporation,
a Florida Corporation
Dated: August 18, 1995 By: /s/ Rebecca R. Irish
--------------- --------------------
Rebecca R. Irish, Treasurer
and Chief Financial Officer
