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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT TO APPLICATION OR REPORT
Filed pursuant to Section 12, 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
TRANSCEND SERVICES, INC.
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(Exact name of registrant as specified in charter)
AMENDMENT NO. TWO
The undersigned registrant hereby amends the following items,
financial statements, exhibits or other portions of its Current Report on Form
8-K (Event April 19, 1995) filed June 30, 1995.
(List all such items, financial statements,
exhibits or other portions amended)
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired:
MEDICAL TRANSCRIPTION OF ATLANTA, INC.
Unaudited Statement of Operations for the Periods from January
1 thru April 19, 1994 and 1995
(b) Pro Forma Financial Information:
TRANSCEND SERVICES, INC. PRO FORMA CONDENSED
FINANCIAL INFORMATION (UNAUDITED)
Pro Forma Condensed Consolidated Statement of Operations for
the Year Ended December 31, 1995
Notes to Pro Forma Condensed Consolidated Financial Statements
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TABLE OF CONTENTS
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PAGE NO.
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(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED:
MEDICAL TRANSCRIPTION OF ATLANTA, INC.
Unaudited Statement of Operations for the Periods from January 1 thru
April 19, 1994 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) PRO FORMA FINANCIAL INFORMATION:
TRANSCEND SERVICES, INC. PRO FORMA
CONDENSED FINANCIAL INFORMATION (UNAUDITED)
Pro Forma Condensed Consolidated Statement of Operations for the Year
Ended December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Pro Forma Condensed Consolidated Financial Statements . . . . . . . . . . . .
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MEDICAL TRANSCRIPTION OF ATLANTA, INC.
UNAUDITED HISTORICAL STATEMENT OF OPERATIONS
FOR THE PERIODS FROM JANUARY 1 THRU APRIL 19, 1994 AND 1995(1)
(IN THOUSANDS)
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1994 1995
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<S> <C> <C>
Net revenues $ 595 $ 561
Direct costs 376 369
----- ----
Gross profit 219 192
----- ----
General and administrative expense 120 124
Operating income 99 68
Other income 1 --
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Pre-Tax income 100 68
Benefit (provision) for income taxes -- --
---- -----
Income from operations $ 100 $ 68
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(1) This is presented thru April 19th, the date of the acquisition at which
time Transcend assumed the responsibility for the operation.
(2) The Medical Transcription of Atlanta, Inc. statement of operations should
be read in conjunction with the financial statements and notes thereto of
Medical Transcription of Atlanta, Inc. for the year ended December 31,
1994 which are included in Transcend's filing of Amendment No. 1 on Form
8-K/A, dated June 30, 1995 to its current report on Form 8-K dated May 2,
1995.
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TRANSCEND SERVICES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE DATA)
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Pro Forma Pro Forma
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Company MTA Adjustments Consolidated
------- --- ----------- ------------
<S> <C> <C> <C> <C>
Net revenues $ 25,882 $ 561 -- $26,443
Direct costs 22,334 369 -- 22,703
------- -------- --------- -------
Gross profit 3,548 192 -- 3,740
Marketing and sales expense 2,186 -- -- 2,186
General and administrative expense 4,604 124 (15)(1) 4,713
Amortization expense of
intangible assets 633 -- 33 (2) 666
------- -------- --------- -------
Operating income (loss) (3,875) 68 (18) (3,825)
Other expense (21) -- (10)(3) (31)
------- -------- --------- -------
Pre-Tax income (loss) (3,896) 68 (28) (3,856)
Benefit (provision) for income taxes -- -- -- --
------- -------- --------- -------
Income (loss) from continuing
operations $(3,896) $ 68 $ (28) $(3,856)
======= ======== ========= =======
Net income (loss) per common share
from continuing operations $ (0.22) $ (0.22)
======= =======
Weighted average common shares
outstanding 17,818 17,836(4)
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TRANSCEND SERVICES, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED DECEMBER 31, 1995
On April 19, 1995, Transcend completed the acquisition of Medical
Transcription of Atlanta, Inc. ("MTA") for $1,372,000, consisting of $550,000
paid in cash at closing, promissory notes of $100,000 and $550,000, and 60,000
shares of Transcend common stock valued at $172,000 at the time of the
acquisition.
The Pro Forma Combined Condensed Statement of Operations is not
necessarily indicative of future operating results or financial position.
(1) Reflects adjustment of general and administrative costs related to MTA
pursuant to the terms of the Asset Purchase Agreement dated April 19,
1995.
(2) Reflects the purchase by Transcend of MTA for a purchase price of
$1,372,000 consisting of $550,000 in cash, promissory notes of $100,000
and $550,000, and 60,000 shares of Transcend stock which will result in
goodwill of $690,000 and other intangible assets of $375,000. Transcend's
policy will be to amortize goodwill over a twenty year period, customer
lists over seven years, and non-compete agreements over three years,
resulting in annual amortization expense of $126,000.
(3) Reflects adjustment of interest expense related to Transcend based on the
interest incurred on the promissory notes of $100,000 and $550,000.
(4) Pro Forma Weighted Average Shares Outstanding have been calculated as
follows (000's):
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Transcend weighted average shares outstanding 17,818
Transcend shares issued for the purchase of MTA (pro-rata) 18
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17,836
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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.
TRANSCEND SERVICES, INC.
Date: May 29, 1996 By: /s/ David W. Murphy
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David W. Murphy
Chief Financial Officer
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