<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
===============================================
FORM 8-K/A
AMENDMENT NO. 2
TO
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
===============================================
Date of Report (Date of earliest event reported): October 9, 1997
Genesis Health Ventures, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 1-11666 06-1132947
- ---------------------------- ----------- -------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
148 West State Street, Suite 100
Kennett Square, Pennsylvania 19348
----------------------------------
(Address of principal executive
offices, including zip code)
610-444-6350
--------------------------------------------------
Registrant's telephone number, including area code
<PAGE>
Item 7 is hereby amended as follows
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
1. Financial Statements of business acquired:
The Multicare Companies, Inc. and Subsidiaries
(1) Independent Auditors' Report (1)
(2) Consolidated Balance Sheets as of December 31, 1995 and 1996 (1)
(3) Consolidated Statements of Operations for the years ended
December 31, 1994, 1995 and 1996 (1)
(4) Consolidated Statements of Stockholders' Equity for the years
ended December 31, 1994, 1995 and 1996 (1)
(5) Consolidated Statements of Cash Flows for the years ended
December 31, 1994, 1995 and 1996 (1)
(6) Notes to Consolidated Financial Statements (1)
(7) Unaudited Consolidated Balance Sheet as of September 30, 1997 (2)
(8) Unaudited Consolidated Statement of Operations for the three and
nine months ended September 30, 1997 (2)
(9) Unaudited Consolidated Statement of Cash Flows for the nine
months ended September 30, 1997 (2)
(10) Unaudited Notes to Consolidated Financial Statements (2)
- -------------------------------
(1) Incorporated by reference to The Multicare Companies, Inc. Annual Report on
Form 10-K for the period ended December 31, 1996.
(2) Incorporated by reference to The Multicare Companies, Inc. Quarterly Report
on Form 10-Q for the period ended September 30, 1997.
2. Pro Forma Financial Information:
<PAGE>
GENESIS HEALTH VENTURES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
SEPTEMBER 30, 1997
The Unaudited Pro Forma Condensed Consolidated Statement of Operations for the
twelve months ended September 30, 1997 gives effect to the following
transactions; (1) the Therapy Purchase and the Pharmacy Purchase, and (2) the
investment in Multicare accounted for under the equity method of accounting as
though the transactions had occurred as of October 1, 1996. The Unaudited Pro
Forma Condensed Consolidated Balance Sheet gives effect to each of the
foregoing transactions as though each transaction had occurred as of September
30, 1997. The contract therapy businesses sold by Multicare to Genesis
pursuant to the Therapy Purchase were primarily acquired by Multicare in April
1997; the pro forma information should be read in conjunction with Genesis'
historical consolidated financial statements. The column entitled "Genesis
Historical Results" represents the historical consolidated results as of
September 30, 1997 and for the twelve months then ended.
The pro forma adjustments are based upon available information and certain
assumptions that management believes are reasonable and are described in the
notes accompanying the Unaudited Pro Forma Condensed Consolidated Statement of
Operations and the Unaudited Pro Forma Condensed Consolidated Balance Sheet.
The Unaudited Pro Forma Condensed Consolidated Financial Information is
provided for informational purposes only and does not purport to represent
what the Company's results of operations or financial position would actually
have been had the transactions in fact occurred at such dates or to project
the Company's results of operations or financial position at or for any future
date or period. The Unaudited Pro Forma Condensed Consolidated Financial
Information has been prepared using the purchase method of accounting, whereby
the total cost of the Therapy Purchase and Pharmacy Purchase are allocated to
the tangible and intangible assets acquired and liabilities assumed based upon
their respective fair values at the effective date of the transactions. Such
allocations are based on studies and valuations which have not yet been
completed. Accordingly, the allocations and estimated lives reflected in the
Unaudited Pro Forma Condensed Consolidated Financial Information are
preliminary and subject to revision. However, the Company does not expect
material changes to the allocation of purchase price.
GENESIS HEALTH VENTURES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1997
(In thousands)
<TABLE>
<CAPTION>
Pro Forma
Genesis
(1) Adjusted for
Therapy Purchase Therapy Purchase,
and (2) Pharmacy Purchase
Genesis Pharmacy Transactions and Transaction
Historical Purchase Adjustments Adjustments
---------- ---- ----------- -----------
<S> <C>
Current assets $ 352,437 $ 30,274 -- $ 382,711
Property and equipment, net 578,397 5,271 -- 583,668
Goodwill, net 359,956 47,334 -- 407,290
Investment in Multicare -- -- 325,000 325,000
Other assets 143,323 -- 27,000 170,323
---------- ---------- ---------- ----------
Total assets $1,434,113 $ 82,879 $ 352,000 $1,868,992
========== ========== ========== ==========
Current liabilities $125,507 $ 8,879 19,000 $ 153,386
Long term debt, excluding current maturities 651,667 74,000 333,000 1,058,667
Deferred taxes 37,745 -- -- 37,745
Other liabilities 11,173 -- -- 11,173
Shareholders' equity 608,021 -- -- 608,021
---------- ========== ========== ==========
Total liabilities and shareholders' equity $1,434,113 $ 82,879 $ 352,000 $1,868,992
========== ========== ========== ==========
</TABLE>
<PAGE>
See Accompanying Notes to Unaudited Pro Forma Condensed Consolidated Balance
Sheet
GENESIS HEALTH VENTURES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
(1) Reflects the Therapy Purchase and the Pharmacy Purchase
<TABLE>
<CAPTION>
Therapy Pharmacy Transactions
Business Business Adjustments Total
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Current assets $ 6,688 $ 23,586 $ -- $ 30,274
Property and equipment 705 4,566 -- 5,271
Goodwill -- -- 47,334 47,334
--------------------------------------------------------------------
Total assets $ 7,393 $ 28,152 $ 47,334 $ 82,879
====================================================================
Current liabilities $ 7,432 $ 1,447 $ -- $ 8,879
Long-term debt 2,162 570 71,268 74,000
Stockholders' equity (2,201) 26,135 (23,934) --
--------------------------------------------------------------------
Total liabilities and stockholders' equity $ 7,393 $ 28,152 $ 47,334 $ 82,879
====================================================================
</TABLE>
(2) Reflects Genesis' financing of its equity investment in Multicare and
related transaction and financing costs.
Transactions
Adjustments
------------
Investment in Multicare $325,000
Debt issuance and
transaction costs, net 27,000
Current portion of
long-term debt 19,000
Long-term debt 333,000
<PAGE>
GENESIS HEALTH VENTURES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED SEPTEMBER 30,1997
(In thousands, except per share data)
<TABLE>
<CAPTION>
Genesis Health Ventures, Inc.
Genesis Transactions Genesis
Historical Adjustments Pro Forma
---------- ---------- --------------
<S> <C> <C> <C> <C>
Net Revenues $1,099,823 $148,817 (1)(4) $1,248,640
Expenses:
Operating Expenses 858,916 94,069 (4) 952,985
Corporate, General & Administrative 41,039 16,000 (1) 57,039
Special Charge 15,000 15,000
Lease Expense 28,587 1,356 (4) 29,943
Depreciation & Amortization 41,946 3,585 (3)(4) 45,531
Interest Expense, Net 39,103 35,358 (2) 74,461
---------- -------- ----------
Total Expenses $1,024,591 $150,368 $1,174,959
---------- -------- ----------
Income (Loss) Before Income Taxes,
Equity in Loss of Unconsolidated
Subsidieries and Extraordinary
Item $ 75,232 $ (1,551) $ 73,681
Income Tax Expense (Benefit) 27,088 (558) (6) 26,530
---------- -------- ---------
Income (Loss) Before,
Equity in Loss of Unconsolidated
Subsidieries 48,144 (993) 47,151
Equity in Loss of Unconsolidated
Subsidieries -- (5,109) (5) (5,109)
---------- -------- ---------
Income (Loss) From Continuing Operations $ 48,144 $ (6,102) $ 42,042
Primary earnings per share
before extraordinary item $ 1.35 $ 1.18
Weighted average shares of
common stock and equivalents 35,643 35,643
Addition to income as a result of
interest on convertible debt 303 303
Fully diluted earnings per share
before extraordinary item $ 1.34 $ 1.17
Weighted average shares of
common stock and equivalents 36,306 36,306
</TABLE>
<PAGE>
GENESIS HEALTH VENTURES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED PROFORMA
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
(1) As a result of the management contract with Multicare, certain corporate
employees of Multicare are employed by Genesis. The management fee charged
by Genesis is reflected as an increase to net revenues.
Genesis
Total corporate general and
expense $ 16,000
========
Management fee 38,186
--------
Revenues, net $ 38,186
========
<PAGE>
(2) Interest expense has been adjusted to reflect the indebtedness
incurred in connection with the investment in Multicare, the Pharmacy
Purchase and the Therapy Purchase. The estimated average interest rate for
the indebtedness incurred is approximately 8.3%.
Genesis
Interest expense $35,358
=======
(3) In connection with the Therapy Purchase and the Pharmacy Purchase,
depreciation and amortization have been increased by the amortization of
goodwill and depreciation resulting from the allocation of purchase
price. The Therapy Purchase and Pharmacy Purchase have preliminarily
resulted in additional goodwill of approximately $47,000 which is
amortized over lives ranging from 20 to 40 years.
Genesis
Depreciation and amortization 1,675
(4) Represents the consolidation of the operating results relating to the
Therapy Sale and the Pharmacy Sale.
<TABLE>
<CAPTION>
Therapy Pharmacy Twelve Months Ended
Business Business September 30, 1997
----------- --------- -------------------
<S> <C> <C> <C>
Revenues, net $23,458 $87,173 $110,631
Operating expenses 20,324 73,745 94,069
Lease expense 112 1,244 1,356
Depreciation and amortization 454 1,456 1,910
</TABLE>
(5) Represents Genesis' 43.6% share of the pro forma Multicare net loss from
continuing operations for the twelve months ended September 30, 1997.
(6) Represents income tax expense at an effective tax rate of 36%.
<PAGE>
THE MULTICARE COMPANIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
SEPTEMBER 30, 1997
The Unaudited Pro Forma Condensed Consolidated Statement of Operations for the
twelve months ended September 30, 1997 gives effect to the following
transactions: (1) the Merger (including the Conversion of Multicare's
Convertible Debentures), (2) the sale of the 9% Notes, (3) the closing of the
Credit Facility, (4) the acquisition of the A.D.S Group ("A.D.S") by Multicare
in December 1996 (the "A.D.S Acquisition"), as though the transaction had
occurred as of October 1, 1996 and (5) the Therapy Sale and the Pharmacy Sale,
as though the transactions had occurred as of October 1, 1996. The proforma
information should be read in conjunction with the Multicare historical
consolidated financial statements. The columns entitled "Multicare Historical
Results" represents the historical consolidated results of Multicare for the
twelve months ended September 30, 1997. The column entitled "A.D.S
Historical" represents the historical results of the A.D.S Group from the
period of October 1, 1996 through December 31, 1996. In December 1996,
Multicare acquired the A.D.S group and consolidated their operating results
commencing on January 1, 1997.
The pro forma adjustments are based upon available information and certain
assumptions that management believes are reasonable and are described in the
notes accompanying the Unaudited Pro Forma Condensed Consolidated Statement of
Operations. The Unaudited Pro Forma Condensed Consolidated Financial
Information is provided for informational purposes only and does not purport
to represent what Multicare's results of operations or financial position
would actually have been had the transactions in fact occurred at such dates
or to project Multicare's results of operations at or for any future date or
period. The Unaudited Pro Forma Condensed Consolidated Financial Information has
been prepared using the purchase method of accounting, whereby the total cost of
the Merger are allocated to the tangible and intangible assets acquired and
liabilities assumed based upon their respective fair values at the effective
date of the transactions. Such allocations are based on studies and valuations
which have not yet been completed. Accordingly, the allocations and estimated
lives reflected in the Unaudited Pro Forma Condensed Consolidated Financial
Information are preliminary and subject to revision. However, Multicare does not
expect material changes to the allocation of purchase price.
<PAGE>
<TABLE>
<CAPTION>
The Multicare Companies, Inc.
THE MULTICARE COMPANIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
TWELVE MONTHS ENDED SEPTEMBER 30, 1997
(IN THOUSANDS)
ADS Therapy Multicare
Multicare ADS Pro Forma Business Transaction Multicare
Historical Historical (1) Adjustments Proforma(11) Adjustments Proforma
----------- --------------- ----------- ------------ ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues $679,292 $15,544 $ -- $12,155 $(75,762)(10) $631,229
Expenses:
Operating Expenses 515,576 13,258 10,522 (59,200)(10) 480,156
Corporate, General & Administrative 31,984 2,047 (125) (2) -- 4,280 (6) 38,186
Lease Expense 15,929 49 861 (3) 46 (4,926)(7)(10) 11,959
Depreciation & Amortization 27,916 365 15 (4) 200 22,986 (8)(10) 51,482
Interest Expense, Net 28,642 535 162 (5) -- 29,177 (7) 58,516
-------- --------- ----- ------ ------- --------
Total Expenses $620,047 $16,254 $ 913 $10,768 ( 7,683) $640,299
-------- --------- ----- ------ ------- --------
Income (Loss) Before Income Taxes
and Extraordinary Item $ 59,245 $ (710) $(913) $ 1,387 $(68,079) $(9,070)
Income Tax Expense (Benefit) 22,152 (273) (351) 499 (19,379)(9) 2,648
-------- ---------- ----- ------ -------- --------
Income (Loss) From Continuing Operations $ 37,093 $ (437) $(562) $ 888 $(48,700) $(11,718)
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Condensed Consolidated Statement
of Operations
<PAGE>
THE MULTICARE COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED PROFORMA
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
(1) Represents the historical results of operations of A.D.S from October 1,
1996 through December 31, 1996. Multicare paid approximately $10,000,
repaid or assumed approximately $29,800 in debt, financed $51,000 through a
lease facility and issued 554,973 shares of its common stock for A.D.S.
Total goodwill approximated $29,900.
(2) Reflects the elimination of duplicative positions at A.D.S and the
reduction of professional and accounting fees.
(3) Reflects the additional lease expense associated with the $51,000 lease
financing entered into in connection with the A.D.S Acquisition. The lease
facility was repaid in connection with the Merger.
(4) Reflects additional depreciation and amortization expense resulting from
the amortization of goodwill incurred in the A.D.S Acquisition and
depreciation resulting from the allocation of the purchase price for A.D.S
to property, plant and equipment. Goodwill is being amortized over periods
of 25 to 40 years.
(5) Reflects the additional interest expense on the incremental debt incurred
in connection with the A.D.S Acquisitions.
(6) The adjustment represents the net increase in corporate, general and
administrative expense due to the elimination of Multicare / A.D.S
proforma corporate, general and administrative expense and the
incurrence of management fees.
Multicare
Multicare / A.D.S Pro Forma
corporate, general and
administrative (33,906)
Management fee 38,186
--------
Corporate, general and
administrative 4,280
========
<PAGE>
(7) Interest and lease expense have been adjusted to reflect all the
indebtedness incurred by Genesis ElderCare Acquisition Corp. in connection
with the Multicare Transaction, the Pharmacy Sale, the Therapy Sale and the
repayment of indebtedness (including the repayment of $54,000 under a lease
financing facility). The estimated average interest rate for the Credit
Facility and for the Notes is 8.4% and 9%, respectively.
Multicare
Credit Facility 33,207
Notes 22,500
Other debt 3,344
Multicare / ADS Pro Forma
interest expense (29,874)
-------
Interest expense 29,177
=======
Lease expense (3,570)
=======
(8) In connection with the Merger, depreciation and amortization have been
increased by the amortization of goodwill and depreciation resulting from
the allocation of purchase price. As a result of the Merger, the
preliminary allocation of the purchase price has resulted in an increase
to property and equipment ($254,000) and goodwill ($657,180) which are
amortized over 30 years and 40 years, respectively.
Multicare
Depreciation and amortization 24,896
(9) Represents income tax expense at an effective tax rate of 36%. The primary
difference between expense calculated at statutory rates and the amount
reflected in the pro forma statements is attributable to non-deductible
goodwill and the provision for state income taxes.
(10) Represents the elimination of the operating results relating to the
Multicare Therapy and Pharmacy businesses in connection with the Therapy
Sale and the Pharmacy Sale.
<TABLE>
<CAPTION>
Impact of
Therapy Pharmacy Intercompany Twelve Months Ended
Business Business Transactions September 30, 1997
----------- --------- ------------ -------------------
<S> <C> <C> <C> <C>
Revenues, net $(23,458) $(87,173) $34,869 $ (75,762)
Operating expenses (20,324) (73,745) 34,869 (59,200)
Lease expense (112) (1,244) -- (1,356)
Depreciation and amortization (454) (1,456) -- (1,910)
</TABLE>
(11) Multicare acquired the majority of its therapy operations in April 1997. As
a result, the Multicare historical statement of operations includes
approximately five months of the recently acquired therapy business. The
column entitled "Therapy Business Pro Forma" represents the estimated
adjustment to the historical therapy business operating results had
Multicare acquired this business on October 1, 1996.
<PAGE>
3. Exhibits:
Exhibit No. Description
----------- -----------
10.1* Agreement and Plan of Merger dated June 16, 1997 by and
among Genesis ElderCare Corp., Genesis ElderCare
Acquisition Corp., Genesis Health Ventures, Inc. and The
Multicare Companies, Inc.
10.2* Third Amended and Restated Credit Agreement dated October
9, 1997 to Genesis Health Ventures, Inc. from Mellon Bank,
N.A., Citicorp USA, Inc., First Union National Bank and
NationsBank, N.A.
-1-
<PAGE>
Exhibit No. Description
----------- -----------
10.3* Credit Agreement dated October 14, 1997 to The Multicare
Companies, Inc. from Mellon Bank, N.A., Citicorp USA,
Inc., First Union National Bank and NationsBank, N.A.
10.4* Management Agreement dated October 9, 1997 among The
Multicare Companies, Inc., Genesis Health Ventures, Inc.
and Genesis ElderCare Network Services, Inc.
10.5* Stockholders' Agreement dated October 9, 1997 among
Genesis ElderCare Corp., The Cypress Group L.L.C., TPG
Partners II, L.P., Nazem, Inc. and Genesis Health
Ventures, Inc.
10.6* Put/Call Agreement dated October 9, 1997 among The Cypress
Group L.L.C., TPG Partners II, L.P., Nazem, Inc. and
Genesis Health Ventures, Inc.
10.7* Stock Purchase Agreement dated October 10, 1997 among
Genesis Health Ventures, Inc., The Multicare Companies,
Inc., Concord Health Group, Inc., Horizon Associates,
Inc., Institutional Health Care Services, Inc., Care4,
L.P., Concord Pharmacy Services, Inc., Compass Health
Services, Inc. and Encare of Massachusetts, Inc.
10.8* Asset Purchase Agreement dated October 10, 1997 among
Genesis Health Ventures, Inc., The Multicare Companies,
Inc., Health Care Rehab Systems, Inc., Horizon
Rehabilitation, Inc., Progressive Rehabilitation Centers,
Inc. and Total Rehabilitation Center, L.L.C.
10.9* Letter Agreement dated June 16, 1997 between Genesis
Health Ventures, Inc. and Straus Associates.
23.1* Consent of Independent Public Accountants
- ----------
* Previously filed.
-2-
<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.
GENESIS HEALTH VENTURES, INC.
By: /s/ George V. Hager, Jr.
-------------------------------------------------
George V. Hager, Jr.
Senior Vice President and Chief Financial Officer
Date: January 26, 1998
