UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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FORM 8-K/A
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report [Date of Earliest Event Reported] September 30, 1997
Commission File Number 0-15266
BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARY
(Exact name of registrant as specified in its charter)
New Jersey 22-2405059
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
481 Edward H. Ross Drive
Elmwood Park, New Jersey 07407-3118
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (201) 791-2600
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Item 7. Financial Statements, Pro Forma Financial Information
BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARY
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
[UNAUDITED]
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The following pro forma condensed combined balance sheet as of July 31, 1997,
and the condensed combined statements of operations for the year ended October
31, 1996 and the nine months ended July 31, 1997, give effect to the following:
On September 30, 1997, Bio-Reference Laboratories, Inc. [the "Company"]
completed the sale of certain assets of its GenCare Division ["GenCare"] to an
unrelated third party, IMPATH, Inc. ["IMPATH"]. GenCare provided oncology and
hematology laboratory testing services to hospitals, hematologists and
oncologists in the New York metropolitan area and Florida. The assets sold
included GenCare customer lists, any Company rights to the "GenCare" Tradename,
certain patient records and rights under a Reagant Purchase and Equipment Rental
Contract and under a laboratory Testing Service Agreement.
The Company retained the rights to the Tradename "GenPath."
The disposition will be effective September 30, 1997 for accounting purposes.
The operations of GenCare will be included in the Company's results of
operations thru September 30, 1997.
In connection with the business disposition, the Company, certain of its
officers and key employees agreed for a 30-month period not to compete with
IMPATH with respect to certain defined areas of the GenCare business. The
Company will continue to market tumor pathology testing services under the name
"GenPath" to urology, gastroenterology and obstetric and gynecology physician
clients. The GenCare business sold accounted for less than 8% of the Company's
annual net revenues for its most recent fiscal year.
The $6 million purchase price was determined in arms-length negotiations between
the parties based in part on GenCare's billings to restricted Customers for
Restricted Tests [as defined in the Agreement and Bill of Sale] during the
three-month period ended June 30, 1997. The purchase price included a $4.6
million cash payment made at the closing with an additional $700,000 to $1.4
million payable in semi-annual installments over a two-year period subject to
certain conditions. The Company purchased GenCare in January 1995 for an
aggregate 473,145 shares of its common stock and approximately $235,000 in
principal amount of its debentures.
The pro forma information is based on the historical financial statements of the
Company and GenCare giving effect to the disposition and the assumptions and
adjustments in the accompanying notes to the pro forma combined financial
statements.
The pro forma condensed combined balance sheet assumes the disposition was
consummated on July 31, 1997. The pro forma condensed combined statements of
operations give effect to this transaction as if it had occurred at the
beginning of the earliest period presented. The pro forma condensed combined
financial statements are based on the historical financial statements of the
Company and GenCare. These pro forma condensed combined financial statements may
not be indicative of the results that actually would have occurred if the
acquisition had taken place on the dates indicated.
The estimated gain on disposal of $3,133,760 will be included in the income of
the company within 12 months following the transaction, but is not considered in
the pro forma income statements.
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BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARY
PRO FORMA ADJUSTMENTS
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[1] To reflect $6,000,000 purchase price: $4,600,000 in cash and $1,400,000
receivable in semi-annual installments over a two year period. The Company
utilized $3,500,000 of cash to reduce the credit line note payable.
[2] To reflect the writedown of GenCare intangible assets as of the September
30, 1997, the disposition date.
[3] To reflect costs incurred due to the divestiture of GenCare. These include,
but are not limited to, severance packages, bonus packages for signed
non-competition agreements and retention of business, legal fees, audit
fees and new and old forms disposal.
[4] Stock issuance related to the original acquisition of GenCare [Second and
final measurement periods]
[5] To remove net income and expenses directly attributable to the GenCare
divested business.
[6] To reflect interest expense saving resulting from the $3,500,000 reduction
in the credit line of approximately $26,000 per month and interest income
earned of approximately $2,700 per month on $1,100,000 in bank money market
and certificate of deposit accounts.
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BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARY
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PRO FORMA CONDENSED COMBINED BALANCE SHEET
[UNAUDITED]
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<TABLE>
Pro Forma
July 31, Adjustments Pro Forma
1 9 9 7 For Disposal As Adjusted
Assets:
Current Assets:
<S> <C> <C> <C>
Cash $ 1,218,498 $ 1,100,000[1] $ 2,318,498
Cash - Restricted 852,000 -- 852,000
Accounts Receivable - Net 13,952,434 -- 13,952,434
Inventory 501,726 -- 501,726
Other Current Assets 465,708 1,400,000[1] 1,865,708
Certificates of Deposits - Restricted 3,556,250 -- 3,556,250
------------ ------------ ------------
Total Current Assets 20,546,616 2,500,000 23,046,616
------------ ------------ ------------
Property, Plant and Equipment 2,981,559 -- 2,981,559
Less: Accumulated Depreciation 1,573,117 -- 1,573,117
------------ ------------ ------------
Total Property, Plant and Equipment - Net 1,408,442 -- 1,408,442
------------ ------------ ------------
Other Assets:
Certificates of Deposit - Restricted 123,750 -- 123,750
Due from Related Party 219,318 -- 219,318
Deposits 187,574 -- 187,574
Goodwill [Net of Accumulated Amortization
of $948,792] 3,010,112 (1,519,237)[2] 1,490,875
Deferred Charges [Net of Accumulated
Amortization of $1,700,174] 3,942,254 (391,559)[2] 3,550,695
Other Assets 341,037 -- 341,037
------------ ------------ ------------
Total Other Assets 7,824,045 (1,910,796) 5,913,249
------------ ------------ ------------
Total Assets $ 29,779,103 $ 589,204 $ 30,368,307
============ ============ ============
The Accompanying Notes are an Integral Part of Pro Forma These Financial Statements.
</TABLE>
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BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARY
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PRO FORMA CONDENSED COMBINED BALANCE SHEET
[UNAUDITED]
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<TABLE>
Pro Forma
July 31, Adjustments Pro Forma
1 9 9 7 For Disposal As Adjusted
Liabilities and Shareholders' Equity:
Current Liabilities:
<S> <C> <C> <C>
Accounts Payable $ 2,362,907 $ -- $ 2,362,907
Salaries and Commissions Payable 811,368 711,500[3] 1,522,868
Accrued Expenses 324,790 80,000[3] 404,790
Current Portion of Long-Term Debt 796,867 -- 796,867
Current Portion of Leases Payable 144,417 -- 144,417
Current Portion of Subordinated Notes 130,329 -- 130,329
Notes Payable 10,852,000 (3,500,000)[1] 7,352,000
Taxes Payable 176,757 -- 176,757
------------ ------------ ------------
Total Current Liabilities 15,599,435 (2,708,500) 12,890,935
------------ ------------ ------------
Long-Term Liabilities:
Long-Term Portion of Long-Term Debt 880,207 -- 880,207
Long-Term Portion of Leases Payable 284,956 -- 284,956
------------ ------------ ------------
Total Long-Term Liabilities 1,165,163 -- 1,165,163
------------ ------------ ------------
Shareholders' Equity:
Preferred Stock, .10 Par Value; Authorized
1,062,589 Shares, None Issued -- -- --
Senior Preferred Stock, $.10 Par Value,
Authorized 604,078 Shares, Issued and
Outstanding 504,078 Shares -- -- --
Common Stock, $.01 Par Value; Authorized
18,333,333 Shares, Issued and Outstanding
7,115,280 Shares 71,153 541[4] 71,694
Additional Paid-In Capital 22,845,046 163,403[4] 23,008,449
Accumulated Deficit (9,541,117) 3,133,760 (6,407,357)
------------ ------------ ------------
Totals 13,375,082 3,297,704 16,672,786
Less: Deferred Compensation (360,577) -- (360,577)
------------ ------------ ------------
Total Shareholders' Equity 13,014,505 3,297,704 16,312,209
------------ ------------ ------------
Total Liabilities and Shareholders'Equity $ 29,779,103 $ 589,204 $ 30,368,307
============ ============ ============
The Accompanying Notes are an Integral Part of These Pro Forma Financial Statements.
</TABLE>
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BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARY
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PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
[UNAUDITED]
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<TABLE>
Nine months ended Pro Forma
July 31, Adjustments Pro Forma
1 9 9 7 For Disposal As Adjusted
<S> <C> <C> <C>
Net Revenue $ 29,064,409 $ (2,116,523)[5] $ 26,947,886
------------ ------------ ------------
Cost of Services:
Depreciation 286,370 -- 286,370
Employee Related Expenses 6,467,929 (231,818)[5] 6,236,111
Reagents and Lab Supplies 3,513,617 (220,118)[5] 3,293,499
Other Cost of Services 4,180,300 (149,809)[5] 4,030,491
------------ ------------ ------------
Total Cost of Services 14,448,216 (601,745) 13,846,471
------------ ------------ ------------
Gross Profit on Revenues 14,616,193 (1,514,778) 13,101,415
------------ ------------ ------------
General and Administrative Expenses:
Depreciation and Amortization 549,235 (93,981)[5] 455,254
Other General and Administrative
Expenses 8,505,267 (225,802)[5] 8,279,465
Bad Debt Expense 3,986,739 (505,486)[5] 3,481,253
Total General and Administrative
Expenses 13,041,241 (825,269) 12,215,972
------------ ------------ ------------
Operating Income 1,574,952 (689,509) 885,443
------------ ------------ ------------
Other [Income] Expenses:
Interest Expense 834,145 (234,000)[6] 600,145
Interest Income (202,191) (24,000)[6] 226,191
------------ ------------ ------------
Other [Income] Expenses - Net 631,954 (258,000) 373,954
------------ ------------ ------------
Income Before Taxes 942,998 (431,509) 511,489
Provision for Income Taxes 52,632 -- 52,632
------------ ------------ ------------
Net Income $ 890,366 $ (431,509) $ 458,857
============ ============ ============
Net Income Per Share $ .15 $ .07
============ ============
Weighted Average Number of Shares
Outstanding 6,571,947 6,571,947
============ ============
The Accompanying Notes are an Integral Part of These Pro Forma Financial Statements.
</TABLE>
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BIO-REFERENCE LABORATORIES, INC. AND SUBSIDIARY
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PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
[UNAUDITED]
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<TABLE>
Year ended Pro Forma
October 31, Adjustments Pro Forma
1 9 9 6 For Disposal As Adjusted
<S> <C> <C> <C>
Net Revenues $ 35,125,878 $ (2,188,446)[5] $ 32,937,432
------------ ------------ ------------
Cost of Services:
Depreciation and Amortization 378,694 -- 378,694
Employee Related Expenses 8,503,156 (432,081)[5] 8,071,075
Reagents and Laboratory Supplies 4,430,381 (226,460)[5] 4,203,921
Other Cost of Services 4,824,164 (199,745)[5] 4,624,419
------------ ------------ ------------
Total Cost of Services 18,136,395 (858,286) 17,278,109
------------ ------------ ------------
Gross Profit 16,989,483 (1,330,160) 15,659,323
------------ ------------ ------------
General and Administrative Expenses:
Depreciation and Amortization 655,192 (125,308)[5] 529,884
Other General and Administrative Expenses 10,761,548 (419,969)[5] 10,341,579
Provision for Doubtful Accounts 4,285,807 (312,451)[5] 3,973,356
Expenses of Abandoned Acquisition 90,700 -- 90,700
Total General and Administrative
Expenses 15,793,247 (857,728) 14,935,519
------------ ------------ ------------
Income from Operations 1,196,236 (472,482) 723,804
------------ ------------ ------------
Other [Income] Expense:
Interest Expense 840,811 (312,000)[6] 528,811
Interest and Other Income (288,395) (32,000)[6] (320,395)
------------ ------------ ------------
Other Expense - Net 552,416 (344,000) 208,416
------------ ------------ ------------
Income Before Income Taxes 643,820 (128,432) 515,388
Provision for Income Taxes 51,862 -- 51,862
------------ ------------ ------------
Net Income $ 591,958 $ (128,432) $ 463,526
============ ============ ============
Net Income Per Share $ .10 $ .08
============ ============
Average Number of Shares Outstanding 6,166,156 6,166,516
============ ============
The Accompanying Notes are an Integral Part of These Consolidated Pro Forma Financial Statements.
</TABLE>
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly authorized and caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Bio-Reference Laboratories, Inc.
(Registrant)
Dated: November 20, 1997 By: /s/ Sam Singer
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Sam Singer
Chief Financial and Accounting Officer
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