<PAGE>
U.S. 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): November 2, 1998
AMEDISYS, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
0-24260 11-3131700
(Commission File Number) (I.R.S. Employer Identification No.)
3029 S. Sherwood Forest Blvd., Ste. 300 Baton Rouge, LA 70816
(Address of principal executive offices including zip code)
(225) 292-2031
(Registrant's telephone number, including area code)
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
Inapplicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Disposition
On November 3, 1998, Amedisys, Inc. (the "Company") and CPII Acquisition
Corp. ("CPII") entered into an Asset Purchase Agreement whereby the Company sold
certain of the assets, subject to the assumption of certain liabilities, of its
proprietary software system (Analytical Medical Systems) and home health care
management division (Amedisys Resource Management) to CPII in exchange for
$11,000,000 cash consideration. The assets being sold consist primarily of
proprietary rights with respect to the home health information system developed
and used by the Company and its subsidiaries; deposits, prepayments or prepaid
expenses relating to the business; contracts; fixtures and equipment; books and
records; rights under warranties; and claims, causes of action, chooses in
action, rights of recovery and rights to set-off. The liabilities being assumed
are those associated with the assumed contracts. The Company has also agreed to
provide limited support services to CPII for the period of one year from the
date of the agreement. This disposition has been deemed "significant."
Accordingly, pro forma financial information illustrating the effect of the sale
was filed as Annex "A" in the original current report on Form 8-K filed with the
Commission November 10, 1998 and is incorporated herein by reference.
Acquisition
On November 2, 1998, Amedisys, Inc. signed a definitive agreement to
purchase certain assets, subject to the assumption of certain liabilities, of 83
home care offices including 35 provider numbers of Columbia/HCA Healthcare
Corporation located in Alabama, Georgia, Louisiana, North Carolina, Oklahoma and
Tennessee. The Company had no material relationship with Columbia/HCA Healthcare
Corporation prior to this transaction. The purchase price of $24,000,000 was
calculated using various factors consistent with industry practice, including
but not limited to: (i) a dollar figure per home care visit, (ii) number of
patients, and (iii) state certificate of need requirements. A portion of the
consideration, $10,000,000, less certain liabilities, was payable November 3,
1998 with the balance of $14,000,000 payable pursuant to a one-year promissory
note at the prime rate of Union Planter's Bank of Louisiana plus 0.75%. The
source for the cash portion of the consideration was from the sale of certain
assets. The assets being purchased consist primarily of furniture, fixtures, and
equipment; prepaid expenses; advances and deposits; inventory; office supplies;
records and files; transferable governmental licenses and permits
authorizations; and rights in, to and under specified licenses, contracts,
leases, and agreements. The liabilities being assumed are the paid-time-off
balances of the Columbia/HCA employees and obligations arising on or subsequent
to the closing dates under the assumed contracts. The closing of the transaction
will occur in two stages. Assets located in Louisiana and Oklahoma will be
acquired November 16, 1998, and the remaining assets will be acquired November
30, 1998. Columbia/HCA has agreed that for a period of two years from the date
of closing it will not compete with the Company in the business of providing
skilled intermittent home care services in the counties/parishes currently
served by the acquired offices. Such covenant does not apply to a home health
agency that is acquired as part of an acquisition of a general acute care
hospital, skilled nursing facility, ambulatory surgical facility, physician
practice management company or assisted living facility. This acquisition is
being accounted for as a purchase. The acquisition has been deemed
"significant."
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Inapplicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Inapplicable.
2
<PAGE>
ITEM 5. OTHER EVENTS
On November 2, 1998, the Company and CareSouth Home Health Services, Inc.
("CareSouth"), an affiliate of CPII Acquisition Corp., entered into a Master
Corporate Guaranty of Service Agreement whereby the Company agreed to act as
guarantor for each Agency Service Agreement between CareSouth and home health
agencies which are owned or managed by the Company. Under the Agency Service
Agreements, CareSouth has agreed to provide payroll processing, billing
services, collection services, cost reporting services and software maintenance
and support for the home health agencies. The Master Corporate Guaranty of
Service Agreement consolidates the fee structure for the Agency Service
Agreements. Under the consolidated fee structure, provided service fees are
collected on a per visit basis, which may be adjusted depending on the
cumulative number of annual visits.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
Inapplicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired.
The financial statements relating to the acquisition required pursuant
to Article 3-05 of Regulation S-X are attached hereto as Annex A.
(b) Pro Forma Financial Information.
The pro forma financial information relating to the acquisition
required pursuant to Article 11 of Regulation S-X is attached hereto
as Annex B.
ITEM 8. CHANGE IN FISCAL YEAR
Inapplicable.
3
<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.
AMEDISYS, INC.
By: /s/ Mitchel G. Morel
-----------------------------
Mitchel G. Morel
Chief Financial Officer, Principal
Financial and Accounting Officer
DATE: January 19, 1999
4
<PAGE>
ANNEX A
COLUMBIA/HCA HOME HEALTH SOUTHEAST
COMBINED STATEMENTS OF REVENUES AND
DIRECT OPERATING EXPENSES
FOR EACH OF THE THREE YEARS IN THE
PERIOD ENDED DECEMBER 31, 1997
TOGETHER WITH AUDITORS' REPORT
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of Amedisys, Inc.:
We have audited the accompanying combined statements of revenues and direct
operating expenses of Columbia/HCA Home Health Southeast (see Note 1) for each
of the three years in the period ended December 31, 1997. These financial
statements are the responsibility of management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the statements of revenues and direct
operating expenses 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
audits provide a reasonable basis for our opinion.
In our opinion, the statements of revenues and direct operating expenses
referred to above present fairly, in all material respects, the combined
revenues and direct operating expenses of Columbia/HCA Home Health Southeast for
each of the three years in the period ended December 31, 1997 in conformity with
generally accepted accounting principles.
New Orleans, Louisiana,
January 14, 1999
<PAGE>
COLUMBIA/HCA HOME HEALTH SOUTHEAST (NOTE 1)
COMBINED STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES
(in thousands)
<TABLE>
<CAPTION>
(Unaudited)
Nine Months
For the Years Ended December 31, Ended September 30,
-------------------------------- ---------------------
1995 1996 1997 1997 1998
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net patient service revenues $86,218 $184,260 $279,866 $233,069 $103,249
------- -------- -------- -------- --------
Direct operating expenses:
Personnel costs 53,771 106,629 172,653 136,391 85,468
Third party management fees 7,373 16,007 34,768 28,954 11,635
Occupancy costs 4,481 9,385 14,515 11,084 8,839
Supplies 4,209 7,482 13,306 10,602 5,277
Contract services 3,289 9,096 5,076 1,991 3,879
Other operating expenses 2,975 10,844 15,472 11,367 8,802
------- -------- -------- -------- --------
Total operating expenses 76,098 159,443 255,790 200,389 123,900
------- -------- -------- -------- --------
Operating income (loss) $10,120 $ 24,817 $ 24,076 $ 32,680 $(20,651)
======= ======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
COLUMBIA/HCA HOME HEALTH SOUTHEAST
NOTES TO COMBINED STATEMENTS OF REVENUES
AND DIRECT OPERATING EXPENSES
DECEMBER 31, 1997, 1996 AND 1995 AND
SEPTEMBER 30, 1998 AND 1997
(Data with respect to the periods ended September 30, 1997 and 1998 is
unaudited)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation
- ---------------------
On November 2, 1998, Amedisys, Inc. ("Amedisys") signed a definitive agreement
(the "Acquisition Agreement") to purchase certain assets, subject to the
assumption of certain liabilities, of 83 home care offices including 35 provider
numbers from Columbia/HCA Healthcare Corporation ("Columbia") located in
Alabama, Georgia, Louisiana, North Carolina, Oklahoma and Tennessee
(collectively referred to herein as the Facilities). The Facilities provide
home health services, primarily to Medicare patients, from offices maintained in
communities located in the states listed above. Amedisys had no material
relationship with Columbia/HCA Healthcare Corporation prior to this transaction.
The purchase price for the Facilities was $24,000,000, plus or minus net current
assets or liabilities assumed. Amedisys will account for the acquisition as a
purchase. The estimated fair values of assets and liabilities acquired, as of
the effective date of the transaction, are as follows (000's):
Prepaid expenses $ 321
Inventory 207
Other current assets 8
Accrued payroll expenses (1,736)
-------
Net current liabilities (1,200)
Property, plant and equipment 1,607
Intangible assets 22,393
-------
$22,800
=======
The accompanying statements of revenues and direct operating expenses present
the combined operating results of the home health agencies acquired by Amedisys.
The direct operating expenses exclude costs such as allocated overhead (see
Note 2) which are not directly involved in revenue producing activities and
depreciation and amortization since such costs are not relevant to financial
analysis of the Facilities on an ongoing basis. The combined statements of
revenues and direct operating expenses are not indicative of the financial
condition or results of operations of the Facilities going forward because of
the changes in the business and omission of various operating expenses as
described above.
<PAGE>
Revenues
- --------
The Facilities have entered into agreements with third-party payers, including
government programs and managed care health plans, under which the Facilities
are paid for providing services to eligible patients at predetermined rates per
diagnosis, fixed per diem rates, discounts from established charges or based on
the costs, as defined, of providing such services. Revenues are recorded at
estimated amounts due from patients and third-party payers for the health care
services provided as those services are provided.
Over 90% of the revenues of the Facilities for the years ended December 31,
1995, 1996 and 1997 and the nine months ended September 30, 1998, relate to
patients participating in the Medicare program. Reimbursement for home health
care services provided to patients under the Medicare program has historically
been based on reimbursement of costs, as defined, subject to certain limits.
Final reimbursement is determined after submission of annual cost reports and
audits thereof by the fiscal intermediaries. Settlements for services provided
to Medicare beneficiaries are estimated and recorded in the period the related
services are rendered and are adjusted in subsequent periods as final
settlements are determined. Under the terms of the Acquisition Agreement, all
receivables and payables associated with the Facilities' Medicare cost report
settlements for all periods through the date of transfer of the assets to
Amedisys are to be retained by Columbia. Columbia believes that adequate
provisions have been made for adjustments that may result from final
determination of amounts earned under these programs.
Contractual allowances as a percentage of gross revenues were approximately 23%
for 1995, 21% for 1996, 29% for 1997 and 27% and 39% for the nine months ended
September 30, 1997 and 1998, respectively. Effective for cost reporting years
beginning after October 1, 1997, home health cost limits were reduced and per
beneficiary limits were established which reduced payments to home health
service providers. These changes in reimbursement limits were primarily
responsible for operating losses incurred by the Facilities in the three months
ended December 31, 1997 and in the nine months ended September 30, 1998.
Additional regulations are expected to change the payment methodology for home
health care services to Medicare patients from a cost based reimbursement system
to a prospective payment system, but predicting the impact of such changes, or
others that may result from changes in government programs is not possible at
this time. The prospective payment system is expected to be effective for cost
reporting years beginning after October 1, 1999, or subsequent.
The Facilities recognize revenue and receivables from government agencies that
are significant to the Facilities operations, but the Facilities do not believe
that there are significant credit risks associated with these receivables.
Income Taxes
- ------------
The operating results of the Facilities are included in the consolidated tax
return of Columbia. No allocation of income taxes is made to the Facilities by
Columbia.
Earnings Per Share
- ------------------
Earnings per share prior to the acquisition by Amedisys is not meaningful and is
therefore not presented.
Use of Estimates
- ----------------
The accounting and reporting policies of the Facilities conform with generally
accepted accounting principles. In preparing the financial statements, Columbia
is required to make estimates and assumptions that affect the amounts reported
in the consolidated financial statements and accompanying notes. Actual results
could differ from those estimates.
<PAGE>
2. RELATED PARTY TRANSACTIONS:
Certain general and administrative expenses, (primarily insurance and employee
benefits) are paid by Columbia on behalf of the Facilities, allocated to the
Facilities monthly and are reflected in the respective caption in the
accompanying statements of revenues and direct operating expenses.
Columbia also allocated certain general overhead expenses to the agencies
monthly in the form of management fees; such allocations have been excluded from
the accompanying statements of revenues and direct operating expenses. Columbia
also credited or charged interest income or expense based on each Facility's
intercompany account balance (if in excess of $50,000) with Columbia at an
annual rate of 10%. Management fee and interest charges by Columbia to the
Agencies are summarized below:
<TABLE>
<CAPTION>
(Unaudited)
Nine Months
For the Years Ended December 31, Ended September 30,
-------------------------------- ---------------------
1995 1996 1997 1997 1998
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Management fees $1,468 $10,873 $ 6,771 $5,639 $2,731
Interest 177 2,212 4,353 3,637 1,413
------ ------- ------- ------ ------
$1,645 $13,085 $11,124 $9,276 $4,144
====== ======= ======= ====== ======
</TABLE>
3. MANAGEMENT AGREEMENTS:
During 1995 through September 30, 1998, certain of the Facilities contracted
with third party management companies to perform billing and collection services
and other managerial services. Fees pursuant to these contracts were generally
determined based upon a fixed dollar amount per home health visit, which ranged
from $3 to $13. The material existing management agreements were not assumed by
Amedisys under terms of the Acquisition Agreement.
4. COMMITMENTS AND CONTINGENCIES:
Leases
- ------
The Company is committed under non-cancelable agreements for real estate and
equipment which expire between 1999 and 2003 and require various minimum annual
rentals. Total minimum rental commitments at December 31, 1997 are as follows:
1999 $2,790,000
2000 1,829,000
2001 826,000
2002 548,000
2003 195,000
----------
$6,188,000
==========
<PAGE>
Investigation Matters
- ---------------------
Government Investigation: Physician Contract Authorized Investigative Demand
Subpoena:
On or about January 9, 1998, Columbia received a subpoena from the U. S.
Attorney for the Middle District of Florida requesting records concerning
physician contracts, durable medical equipment, pharmacy services contracts and
similar kinds of arrangements. The relevant time period for the documents
requested by the subpoena is January 1, 1989 through January 21, 1998. The
investigation relates to Columbia's business practices. Columbia is cooperating
in these investigations and understands, through written notice and other means,
that it is a target in these investigations. Given the scope of the ongoing
investigations, Columbia expects additional subpoenas and other investigative
and prosecutorial activity to occur in these and other jurisdictions in the
future. Were Columbia to be found in violation of federal or state laws relating
to Medicare, Medicaid or similar programs, Columbia could be subject to
substantial monetary fines, civil and criminal penalties and exclusion from
participation in the Medicare and Medicaid programs.
Home Health Subpoena:
On or about July 16, 1997, Columbia received a subpoena regarding home health
issues. Pursuant to this subpoena, documents were requested, inter alia, from
the following hospitals and their home health agencies, all of which were
acquired by Amedisys, Columbia Four Rivers Medical Center, Columbia Regional
Medical Center, Dunwoody Medical Center, Parkway Medical Center, Redmond
Regional Medical Center, West Paces Medical Center, Lakeview Regional Medical
Center, Raleigh Community Hospital, Southern Hills Medical Center and Columbia
Homecare Oklahoma (4 locations). Additionally, two Community Educators at
Columbia Homecare Group received subpoenas duces tecum regarding home health
issues.
Other Matters:
Columbia and/or its affiliates are defendants in various cases that are
potentially national or regional in scope, as more fully described in Columbia's
quarterly report filed with the Securities and Exchange Commission for the
period ended September 30, 1998.
Columbia has agreed to indemnify Amedisys for any liabilities resulting from
these matters, subject to certain thresholds and deductibles.
The accompanying statements of revenues and direct operating expenses do not
include provision for any losses which might result from the outcome of the
investigation matters described above.
<PAGE>
ANNEX B
AMEDISYS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1998
(In 000's, except per share amounts)
<TABLE>
<CAPTION>
Effect of Columbia/HCA
Sale Acquisition
Historical (Note C) (Note D) Pro Forma
---------- --------- ------------ ---------
ASSETS
<S> <C> <C> <C> <C>
Current Assets:
Cash $ 0 $ 10,950 $ (8,792) $ 2,158
Accounts Receivable, Net of Allowance for Doubtful Accounts 1,243 (347) 0 896
Prepaid Expenses 933 (5) 321 1,249
Other Current Assets 4,378 0 207 4,585
-------- -------- -------- --------
Total Current Assets 6,554 10,598 (8,264) 8,888
Notes Receivable from Related Parties 198 0 0 198
Property, Plant and Equipment, Net 6,533 (36) 1,607 8,104
Other Assets, Net 10,122 (1) 22,393 32,514
-------- -------- -------- --------
Total Assets $ 23,407 $ 10,561 $ 15,736 $ 49,704
======== ======== ======== ========
LIABILITIES
Current Liabilities:
Notes Payable $ 2,457 $ (50) 0 $ 2,407
Outstanding Checks in Excess of Bank Balance 3,056 0 0 3,056
Current Portion of Long-Term Debt and Short Term Debt 927 0 14,000 14,927
Accounts Payable 2,406 (24) 0 2,382
Accrued Expenses:
Payroll and Payroll Taxes 1,529 (48) 1,736 3,217
Insurance 793 0 0 793
Income Taxes 0 0 0 0
Other 1,406 11 0 1,417
-------- -------- -------- --------
Total Current Liabilities 12,574 (111) 15,736 28,199
Long-Term Debt 4,977 0 0 4,977
Other Long-Term Liabilities 1,136 0 0 1,136
-------- -------- -------- --------
Total Liabilities 18,687 (111) 15,736 34,312
-------- -------- -------- --------
Minority Interest 3 0 0 3
-------- -------- -------- --------
STOCKHOLDERS' EQUITY
Common Stock 3 0 0 3
Preferred Stock 1 0 0 1
Additional paid-in capital 12,006 0 0 12,006
Treasury Stock (25) 0 0 (25)
Stock Subscriptions Receivable (1) 0 0 (1)
Retained Earnings (deficit) (7,267) 10,672 0 3,405
-------- -------- -------- --------
Total Stockholders' Equity 4,717 10,672 0 15,389
-------- -------- -------- --------
Total Liabilities and Stockholders' Equity $ 23,407 $ 10,561 $ 15,736 $ 49,704
======== ======== ======== ========
</TABLE>
<PAGE>
AMEDISYS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(In 000's, except per share amounts)
<TABLE>
<CAPTION>
Effect of Effect of Columbia/HCA Pro Forma
Staffing Sale Sale Acquisition Adjustments
Historical (Note B) (Note C) (Note D) (Note D) Pro Forma
--------- -------- ------ --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Income:
Service Revenue 21,896 0 (831) 103,249 0 124,314
Cost of Service Revenue 12,729 0 (191) 123,900 (3,274) 133,164
--------- -------- ------ --------- ------- ---------
Gross Margin 9,167 0 (640) (20,651) 3,274 (8,850)
--------- -------- ------ --------- ------- ---------
General and Administrative Expenses:
Salaries and benefits 12,524 0 (291) 0 0 12,233
Other 13,810 0 (594) 0 845 14,061
--------- -------- ------ --------- ------- ---------
Total General and Administrative Expenses 26,334 0 (885) 0 845 26,294
--------- -------- ------ --------- ------- ---------
Operating Income (loss) (17,167) 0 245 (20,651) 2,429 (35,144)
--------- -------- ------ --------- ------- ---------
Other Income and Expense:
Interest income 37 0 0 0 0 37
Interest expense (760) 0 16 0 (893) (1,637)
Miscellaneous 115 0 (1) 0 0 114
--------- -------- ------ --------- ------- ---------
Total Other Income and Expense (608) 0 15 0 (893) (1,486)
--------- -------- ------ --------- ------- ---------
Income (loss) before income taxes, minority interest, and
discontinued operations (17,775) 0 260 (20,651) 1,536 (36,630)
Provision (benefit) for Estimated Income Taxes (4,809) 0 104 (8,260) 614 (12,351)
--------- -------- ------ --------- ------- ---------
Income (loss) before Minority Interest and
Discontinued Operations (12,966) 0 156 (12,391) 922 (24,279)
Minority Interest in Consolidated Subsidiary 0 0 0 0 0 0
--------- -------- ------ --------- ------- ---------
Income (loss) Before Discontinued Operations (12,966) 0 156 (12,391) 922 (24,279)
Discontinued Operations, Net of Income Tax 4,495 (4,495) 0 0 0 0
--------- -------- ------ --------- ------- ---------
Net Income (loss) $ (8,471) $ (4,495) $ 156 $ (12,391) $ 922 $ (24,279)
========= ======== ====== ========= ======= =========
Weighted Average Common Shares Outstanding 3,060 --- --- --- --- 3,060
Income (loss) per share before cumulative effect of
change in accounting principle (2.77) N/A N/A N/A N/A (7.93)
</TABLE>
<PAGE>
AMEDISYS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(In 000's, except per share amounts)
<TABLE>
<CAPTION>
Effect of Effect of Columbia/HCA Pro Forma
Staffing Sale Sale Acquisition Adjustments
Historical (Note B) (Note C) (Note D) (Note D) Pro Forma
---------- ------------ --------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Income:
Service Revenue 37,204 0 (2,992) 279,866 0 314,078
Cost of Service Revenue 19,096 0 (310) 255,790 (15,994) 258,582
--------- ------------ -------- ---------- --------- ----------
Gross Margin 18,108 0 (2,682) 24,076 15,994 55,496
--------- ------------ -------- ---------- --------- ----------
General and Administrative Expenses:
Salaries and benefits 11,029 0 (359) 0 0 10,670
Other 11,029 0 (595) 0 1,126 11,560
--------- ------------ -------- ---------- --------- ----------
Total General and Administrative
Expenses 22,058 0 (954) 0 1,126 22,230
--------- ------------ -------- ---------- --------- ---------
Operating Income (loss) (3,950) 0 (1,728) 24,076 14,868 33,266
--------- ------------ -------- ---------- --------- ---------
Other Income and Expense:
Interest income 31 0 0 0 0 31
Interest expense (734) 0 40 0 (1,190) (1,884)
Miscellaneous (130) 0 (6) 0 0 (136)
--------- ------------ -------- ---------- --------- ---------
Total Other Income and Expense (833) 0 34 0 (1,190) (1,989)
--------- ------------ -------- ---------- --------- ---------
Income (loss) before income taxes, minority
interest, and cumulative effect of change
in accounting principle (4,783) 0 (1,694) 24,076 13,678 31,277
Provision (benefit) for Estimated Income Taxes (1,675) 0 (678) 9,630 5,471 12,748
--------- ------------ -------- ---------- --------- ---------
Income (loss) before Minority Interest and
Discontinued Operations (3,108) 0 (1,016) 14,446 8,207 18,529
Minority Interest in Consolidated Subsidiary 209 0 0 0 0 209
--------- ------------ -------- ---------- --------- ---------
Income (loss) Before Discontinued Operations (2,899) 0 (1,016) 14,446 8,207 18,738
Discontinued Operations, Net of Income Tax 1,940 (1,940) 0 0 0 0
--------- ------------ -------- ---------- --------- ---------
Net Income (loss) before cumulative
effect of change in accounting
principle ($959) ($1,940) ($1,016) $14,446 $8,207 $18,738
========= ============ ======== ========== ========= =========
Weighted Average Common Shares Outstanding 2,735 -- -- -- -- 2,735
Income (loss) per share before cumulative
effect of change in accounting principle $(0.35) N/A N/A N/A N/A $6.85
</TABLE>
<PAGE>
AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A. Basis of Presentation
On November 2, 1998, Amedisys, Inc. signed a definitive agreement to
purchase certain assets, subject to the assumption of certain liabilities, of 83
home care offices including 35 provider numbers of Columbia/HCA Healthcare
Corporation located in Alabama, Georgia, Louisiana, North Carolina, Oklahoma and
Tennessee. Also on November 2, 1998, the Company and CareSouth Home Health
Services, Inc. ("CareSouth"), an affiliate of CPII Acquisition Corp., entered
into a Master Corporate Guaranty of Service Agreement whereby the Company agreed
to act as quarantor for each Agency Service Agreement between CareSouth and home
health agencies which are owned or managed by the Company. Under the Agency
Service Agreements, CareSouth has agreed to provide payroll processing, billing
services, collection services, cost reporting services and software maintenance
and support for the home health agencies. The Master Corporate Guaranty of
Service Agreement consolidates the fee structure for the Agency Service
Agreements. Under the consolidated fee structure, service fees are collected on
a per visit basis, which may be adjusted depending on the cumulative number of
annual visits.
On November 3, 1998, the Company sold certain assets, subject to the
assumption of certain liabilities, of its proprietary software system
(Analytical Medical Systems) and home heath care management division (Amedisys
Resource Management) to CPII Acquisition Corp.
The accompanying pro forma condensed consolidated balance sheet has been
prepared by applying certain pro forma adjustments to historical financial
information, assuming the Columbia/HCA acquisition and the disposition discussed
in the preceding paragraph occurred on September 30, 1998.
The pro forma condensed consolidated statements of operations for the year
ended December 31, 1997 and the nine month period ended September 30, 1998 have
been prepared based upon certain pro forma adjustments to historical financial
information, assuming the Columbia/HCA acquisition, the CareSouth transaction,
and the disposition occurred on January 1, 1997.
The pro forma data is not necessarily indicative of the operating results
or financial position that would have occurred had the transaction described
above been consummated at the dates indicated, nor necessarily indicative of
future operating results or financial position.
Basic net income (loss) per share of common stock is calculated by dividing
net income (loss) applicable to common stock by the weighted average number of
common shares outstanding during the year. Diluted net income (loss) per share
is not presented because stock options and convertible securities outstanding
during the periods presented were not dilutive.
B. Staffing Division Effect of Sale
On September 21, 1998, the Company sold certain assets, subject to the
assumption of certain liabilities, of its wholly-owned subsidiaries of Amedisys
Staffing Services, Amedisys Nursing Services, and Amedisys Home Health, Inc. to
Nursefinders, Inc. The Company filed a Current Report on Form 8-K with the SEC
on October 5, 1998. The accompanying historical statement of operations for the
year ended December 31, 1997 has been restated to reflect the operating results
of the staffing division as a discontinued operation.
C. Software and Home Health Care Management Division Effect of Sale
(1) Reflects the Software and Home Health Care Management Division
financial position as of September 30, 1998 in the balance sheet in
addition to the following adjustments:
a. Increase to Cash of $11,000,000 to reflect the portion of the
purchase price payable upon closing.
<PAGE>
b. Decrease to both Cash and Notes Payable of $50,000 to reflect the
pay-down on the line of credit which is secured by accounts receivable.
(2) Reflects the Software and Home Health Care Management Division
operating results and direct overhead operating costs for the nine month period
ending September 30, 1998 in the statement of operations, with an adjustment to
the Company's income tax expense assuming an effective tax rate of 40%.
(3) Reflects the Software and Home Health Care Management Division
operating results and direct overhead operating costs for the fiscal year ended
December 31, 1997 in the statement of operations, with an adjustment to the
Company's income tax expense assuming an effective tax rate of 40%.
D. Columbia/HCA Acquisition
(1) Balance Sheet Adjustments--
a. Reflect a decrease in cash representing cash consideration paid at
closing
b. Reflect the fair values of the assets and liabilities acquired
c. Reflect a short-term note payable representing the portion of
purchase price financed with Columbia/HCA
(2) Statement of Operations Adjustments--
a. Reflect the operating results of the home health agencies acquired
for the periods ending September 30, 1998 and December 31, 1997
b. Reflect a decrease in third party management fees based upon
estimated home health visits realized by Columbia/HCA and the management
fee structure under the CareSouth service agreement
c. Reflect the amortization of goodwill based upon a 25 year life and
the depreciation of property, plant and equipment based upon estimated
seven year average remaining useful life
d. Reflect interest expense on the Columbia/HCA note payable
e. Reflect the effect of adjustments a through d on the Company's
income tax expense (benefit) assuming an effective tax rate of 40%
<PAGE>
EXHIBITS
Exhibit
No.
2.1(1) Asset Purchase Agreement by and between CPII
Acquisition Corp. and Amedisys, Inc.
2.2(1) Asset Purchase Agreement by and between Columbia/HCA
Healthcare Corporation and Amedisys, Inc.
(1) Previously filed in the Company's Current Report on
Form 8-K dated November 10, 1998, and incorporated
herein by reference.
