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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: APRIL 14, 1998
COMMISSION FILE NUMBER: 01-9723
PHARMACEUTICAL MARKETING SERVICES INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 51-0335521
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
SUITE 912, 45 ROCKEFELLER PLAZA, NEW YORK 10111
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 841-0610
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Pharmaceutical Marketing Services Inc. (the "Company") announced in May 1996
that it intended to concentrate on its core activities of information services
to the pharmaceutical and healthcare industries and, that as a result of this,
it would be divesting certain of its non-core businesses.
The divestment program was completed on March 31, 1998 when the Company's wholly
owned subsidiary, PMSI Holdings Ltd finalized the sale of its French point of
sale business, IMR Finance SA, to Ivan and Dominique Morgen for cash
consideration of approximately $3.2 million. The balance sheet sold included
cash of $1.2 million.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Financial Information
1. Unaudited Pro Forma Consolidated Balance Sheet at December 31,
1997.
2. Unaudited Pro Forma Consolidated Statement of Operations for the
Fiscal Year ended June 30, 1997.
3. Unaudited Pro Forma Consolidated Statement of Operations for the
Six Months ended December 31, 1997.
4. Unaudited Notes to the Pro Forma Financial Statements.
(c) Exhibits
2. Purchase Agreement dated March 31, 1998 by and among PMSI Holdings
Ltd (as seller), and Ivan and Dominique Morgen (as purchasers).
(Copy available upon request).
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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 thereunto duly authorized.
PHARMACEUTICAL MARKETING SERVICES INC.
Date: April 14, 1998 By: Raymund M. Davies
Treasurer and Chief
Financial Officer
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PRO FORMA FINANCIAL INFORMATION
For purposes of this presentation, pro forma adjustments have been made to the
historical results of operations and balance sheet to provide information as to
how the disposition may have affected the results of operations and financial
position. The unaudited pro forma consolidated balance sheet was prepared as if
the disposition had occurred as of December 31, 1997.
The unaudited pro forma consolidated statement of operations assumes the
disposition had taken place at the beginning of the corresponding fiscal year.
This unaudited pro forma information does not purport to be indicative of the
results of operations that would have been obtained if the disposition had
occurred at the beginning of the fiscal year presented, and is not intended to
be a projection of future results.
The following pro forma financial information is provided:
1. Unaudited Pro Forma Consolidated Balance Sheet at December 31,
1997.
2. Unaudited Pro Forma Consolidated Statement of Operations for the
Fiscal Year ended June 30, 1997.
3. Unaudited Pro Forma Consolidated Statement of Operations for the
Six Months ended December 31, 1997.
4. Unaudited Notes to the Pro Forma Financial Statements.
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PHARMACEUTICAL MARKETING SERVICES INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL BUSINESS PRO FORMA
BALANCE DISPOSED BALANCE
SHEET SHEET
DECEMBER 31, DECEMBER 31,
1997 1997
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 52,778 $ 2,002 $ 54,780
Marketable securities 61,213 -- 61,213
Accounts receivable, principally trade 24,530 -- 24,530
Work in process 1,355 -- 1,355
Prepaid expenses and other current assets 4,604 -- 4,604
Net current assets held for sale 611 (611) --
-------- -------- --------
Total current assets 145,091 1,391 146,482
Marketable securities 9,491 -- 9,491
Property and equipment, net 9,082 -- 9,082
Goodwill, net 22,641 -- 22,641
Other assets, net 7,005 -- 7,005
Net assets held for sale 11,286 (11,286) --
-------- -------- --------
Total assets $204,596 $ (9,895) $194,701
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $ 54 $ -- $ 54
Accounts payable 7,444 -- 7,444
Accrued liabilities 37,548 (7,625) 29,923
Unearned income 24,725 -- 24,725
-------- -------- --------
Total current liabilities 69,771 (7,625) 62,146
Long-term debt 69,030 -- 69,030
Unearned income 7,061 -- 7,061
Other liabilities 460 -- 460
-------- -------- --------
Total liabilities 146,322 (7,625) 138,697
Commitments and contingencies
Stockholders' equity 58,274 (2,270) 56,004
-------- -------- --------
Total liabilities and stockholders' equity $204,596 $ (9,895) $194,701
======== ======== ========
</TABLE>
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PHARMACEUTICAL MARKETING SERVICES INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL LESS: PRO FORMA
RESULTS BUSINESS RESULTS
six months ended DISPOSED six months ended
December 31, 1997 December 31, 1997
-------- -------- --------
<S> <C> <C> <C>
Revenue $ 41,666 $ -- $ 41,666
Production costs (21,980) -- (21,980)
Selling, general and administrative expenses (16,091) -- (16,091)
In process research and development write off (12,046) -- (12,046)
Amortization of intangible assets (684) -- (684)
Impairment of assets held for sale (14,735) 14,735 --
Income from assets held for sale (188) 188 --
-------- -------- --------
Operating income (loss) (24,058) 14,923 (9,135)
Gain on sale of operations 36,239 -- 36,239
Interest and other income 1,962 -- 1,962
Interest expense (2,330) -- (2,330)
-------- -------- --------
Income from continuing operations
before income taxes 11,813 14,923 26,736
Income tax provision (9,149) (7,401) (16,550)
-------- -------- --------
Income from continuing operations $ 2,664 $ 7,522 $ 10,186
======== ======== ========
Income per share:
Continuing operations, basic $ 0.20 $ 0.57 $ 0.77
Net income, basic 0.20 0.57 0.77
Continuing operations, diluted 0.20 0.48 0.68
Net income, diluted 0.20 0.48 0.68
Weighted average number of common
shares 13,163 13,163 13,163
======== ======== ========
</TABLE>
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PHARMACEUTICAL MARKETING SERVICES INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL LESS: PRO FORMA
RESULTS BUSINESS RESULTS
for the year ended DISPOSED for the year ended
June 30, 1997 June 30, 1997
-------- -------- --------
<S> <C> <C> <C>
Revenue $ 98,485 $ -- $ 98,485
Production costs (54,457) -- (54,457)
Selling, general and administrative expenses (34,847) -- (34,847)
Amortization of intangible assets (1,733) -- (1,733)
Income from assets held for sale 76 (76) --
-------- -------- --------
Operating income 7,524 (76) 7,448
Interest and other income 3,299 -- 3,299
Interest expense (3,490) -- (3,490)
-------- -------- --------
Income from continuing operations
before income taxes 7,333 (76) 7,257
Income tax provision (2,655) 27 (2,628)
Minority interest (17) -- (17)
-------- -------- --------
Income from continuing operations 4,661 (49) 4,612
Loss from discontinued operations (9,914) 9,621 (293)
-------- -------- --------
Net income (loss) $ (5,253) $ 9,572 $ 4,319
======== ======== ========
Income (loss) per share:
Continuing operations, basic $ 0.35 $ -- $ 0.35
Net income (loss), basic (0.40) 0.73 0.33
Continuing operations, diluted 0.35 -- 0.35
Net income (loss), diluted (0.40) 0.73 0.33
Weighted average number of common
shares 13,187 13,187 13,187
======== ======== ========
</TABLE>
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EXPLANATORY NOTES TO THE PRO FORMA FINANCIAL STATEMENTS
1. The category "business disposed" reflects the entity which the company
has divested at the time of this filing.
2. The pro forma adjustment to cash and cash equivalents of $2.0 million
represents cash consideration received of $3.2 million net of cash in the
balance sheet sold of $1.2 million.
3. The pro forma adjustment to accrued liabilities represents tax benefits
recognized on sale of the business and expenses incurred on disposal.
4. The loss arising on sale of the business, net of tax benefits, has been
fully reflected in the pro forma balance sheet.
