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 1934
Date of Report: November 12, 1996
US DIAGNOSTIC INC.
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(Exact name of registrant as specified in charter)
DELAWARE
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(State of other jurisdiction of incorporation)
1-13392 11-3146389
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(Commission File Number) (IRS Employer
Identification No.)
777 SOUTH FLAGLER DRIVE, SUITE 1201, EAST TOWER, WEST PALM BEACH, FLORIDA 33401
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(Address of principal executive offices) (Zip Code)
Registrant's telephone no. including area code:(561)832-0006
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
MEDICAL IMAGING CENTERS OF AMERICA, INC.
On November 12, 1996, the Company completed its previously announced merger (the
"Merger") with Medical Imaging Centers of America, Inc. ("MICA"). Pursuant to
the Merger, each outstanding share of MICA's common stock ("MICA Common Stock"),
was converted into a right to receive $11.75 in cash (the "Merger
Consideration"). Each option to purchase MICA Common Stock (each "MICA Option")
was cancelled and each holder of a MICA Option became entitled to a cash payment
equal to the product of the total number of shares subject to the MICA Option
and the excess of $11.75 over the exercise price per share of the MICA Common
Stock subject to the MICA Option.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
Audited Consolidated Financial Statements of Medical Imaging Centers of
America, Inc. as of and for the year ended December 31, 1995. (1)
Unaudited Consolidated Financial Statements of Medical Imaging Centers
of America, Inc. as of and for the nine months ended September 30,
1996. (2)
Auditors report on the Consolidated Financial Statements of Medical
Imaging Centers of America, Inc. as of and for the year ended December
31, 1995.
(b) Pro Forma Financial Condensed Consolidated Balance Sheets (Unaudited)
reflecting the acquisition of Medical Imaging Centers of America, Inc.
("MICA") as of December 31, 1995 and September 30, 1996 and Condensed
Consolidated Pro Forma Statements of Operations (Unaudited) for the
year ended December 31, 1995 and the nine months ended September 30,
1996.
- --------------------
(1) Incorporated by reference to Medical Imaging Centers of America, Inc.
Report on Form 10-K as of December 31, 1995.
(2) Incorporated by reference to Medical Imaging Centers of America, Inc.
Report on Form 10-Q as of September 30, 1996.
2
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
The Board of Directors and Shareholders
Medical Imaging Centers of America, Inc.
We have audited the consolidated balance sheets of Medical Imaging Centers of
America, Inc. as of December 31, 1995 and 1994, and the related consolidated
statements of operations, shareholders' equity (net capital deficiency) and cash
flows for each of the three years in the period ended December 31, 1995
incorporated by reference herein from the Annual Report on Form 10-K of Medical
Imaging Centers of America as of December 31, 1995. These financial statements
are the responsibility of the Company's 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 audit to obtain
reasonable assurance about whether the financial statements 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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Medical Imaging
Centers of America, Inc. at December 31, 1995 and 1994, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1995 in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
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ERNST & YOUNG LLP
San Diego, California
February 2, 1996
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
US DIAGNOSTIC INC.
Dated: July 1, 1997 By: /S/ JOSEPH A. PAUL
-------------------------------------
Joseph A. Paul
Chief Executive Officer,
Chief Operating Officer and President
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<TABLE>
<CAPTION>
US DIAGNOSTIC INC. AND SUBSIDIARIES ("USDL") AND MEDICAL IMAGING CENTERS OF
AMERICA, INC.("MICA") PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) DECEMBER 31, 1995
(In thousands)
PRO FORMA
USDL MICA ADJUSTMENTS PRO FORMA
---- ---- ----------- ---------
<S> <C> <C> <C> <C>
Assets:
Current Assets:
Cash and Cash Equivalents $ 4,374 $10,732 $ - $ 15,106
Accounts Receivable 10,819 7,711 - 18,530
Prepaid Expenses 900 725 - 1,625
Other Current Assets 271 - - 271
-------- ------- --------- ---------
Total Current Assets 16,364 19,168 - 35,532
Property and Equipment - Net 22,551 17,074 - 39,625
Intangible Assets - Net 17,993 1,087 34,855 (1) 53,935
Other Assets 371 830 - 1,201
Investment in Unconsolidated Subsidiaries - 1,489 - 1,489
-------- ------- --------- ---------
Total Assets $ 57,279 $39,648 $ 34,855 $ 131,782
-------- ------- --------- ---------
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
F-1
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<TABLE>
<CAPTION>
US DIAGNOSTIC INC. AND SUBSIDIARIES ("USDL") AND MEDICAL IMAGING CENTERS OF
AMERICA, INC.("MICA") PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) DECEMBER 31, 1995
(In thousands)
PRO FORMA
USDL MICA ADJUSTMENTS PRO FORMA
---- ---- ----------- ---------
<S> <C> <C> <C> <C>
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts Payable and Accrued Expenses $ 2,862 $ 4,870 $ - $ 7,732
Short-Term Borrowings 667 - - 667
Long-Term Debt and Capital Leases, Current Portion 6,352 13,961 - 20,313
Other Current Liabilities 537 - - 537
-------- --------- ------- --------
Total Current Liabilities 10,418 18,831 - 29,249
Subordinated Convertible Debentures - 5,400 - 5,400
Long-Term Debt and Capital Leases 21,065 11,182 37,868 (2) 70,115
Other Liabilities 423 - - 423
Deferred Income Taxes 164 - - 164
-------- --------- ------- --------
Total Liabilities 32,070 35,413 37,868 105,351
Minority Interests 716 1,222 - 1,938
Stockholders' Equity:
Common Stock 70 54,691 (54,691) (3) 70
Additional Paid in Capital 22,954 - - 22,954
Retained Earnings 2,496 (51,678) 51,678 (3) 2,496
Deferred Stock Based Compensation (1,027) - - (1,027)
-------- --------- ------- --------
Total Stockholders' Equity 24,493 3,013 (3,013) 24,493
-------- --------- ------- --------
Total Liabilities and Stockholders' Equity $ 57,279 $ 39,648 $34,855 $131,782
-------- --------- ------- --------
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
F-2
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<TABLE>
<CAPTION>
US DIAGNOSTIC INC. AND SUBSIDIARIES ("USDL") AND MEDICAL IMAGING CENTERS OF
AMERICA, INC.("MICA") PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) SEPTEMBER 30, 1996
(In thousands)
PRO FORMA
USDL MICA ADJUSTMENTS PRO FORMA
---- ---- ----------- ---------
<S> <C> <C> <C> <C>
Assets:
Current Assets
Cash and Cash Equivalents $ 81,863 $ 5,224 $ (37,868) (2) $ 49,219
Accounts Receivable 28,614 7,473 - 36,087
Prepaid Expenses 5,222 775 - 5,997
Other Current Assets 930 - - 930
--------- --------- ---------- ---------
Total Current Assets 116,629 13,472 (37,868) 92,233
Property and Equipment - Net 51,262 12,660 - 63,922
Intangible Assets - Net 94,154 710 31,037 (1) 125,901
Other Assets 4,576 790 - 5,366
Investment in Unconsolidated Subsidiaries 5,198 1,494 - 6,692
--------- --------- ---------- ---------
Total Assets $ 271,819 $ 29,126 $ (6,831) $ 294,114
--------- --------- ---------- ---------
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
F-3
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<TABLE>
<CAPTION>
US DIAGNOSTIC INC. AND SUBSIDIARIES ("USDL") AND MEDICAL IMAGING CENTERS OF
AMERICA, INC.("MICA") PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) SEPTEMBER 30, 1996
(In thousands)
PRO FORMA
Liabilities and Stockholders' Equity: USDL MICA ADJUSTMENTS PRO FORMA
---- ---- ----------- ---------
<S> <C> <C> <C> <C>
Current Liabilities:
Accounts Payable and Accrued Expenses $ 6,871 $ 3,429 $ - $ 10,300
Short-Term Borrowings 750 - - 750
Long-Term Debt and Capital Leases, Current Portion 15,355 7,723 - 23,078
Other Current Liabilities 2,191 - - 2,191
---------- -------- -------- ---------
Total Current Liabilities 25,167 11,152 - 36,319
Subordinated Convertible Debentures 56,126 2,800 - 58,926
Long-Term Debt and Capital Leases 42,208 7,253 - 49,461
Other Liabilities 351 - - 351
Deferred Income Taxes 7,925 - - 7,925
---------- -------- -------- ---------
Total Liabilities 131,777 21,205 - 152,982
Minority Interests 5,205 1,090 - 6,295
Stockholders' Equity:
Common Stock 229 55,996 (55,996) (3) 229
Additional Paid in Capital 135,848 - - 135,848
Retained Earnings 5,066 (49,165) 49,165 (3) 5,066
Deferred Stock Based Compensation (6,306) - - (6,306)
---------- -------- -------- ---------
Total Stockholders' Equity 134,837 6,831 (6,831) 134,837
---------- -------- -------- ---------
Total Liabilities and Stockholders' Equity $ 271,819 $29,126 $ (6,831) $ 294,114
---------- -------- -------- ---------
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
F-4
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<TABLE>
<CAPTION>
US DIAGNOSTIC INC. AND SUBSIDIARIES ("USDL") AND MEDICAL IMAGING CENTERS OF
AMERICA, INC.("MICA") PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) NINE MONTHS ENDED SEPTEMBER 30, 1996
(In thousands, except per share data)
PRO FORMA
USDL MICA ADJUSTMENTS PRO FORMA
---- ---- ----------- ---------
<S> <C> <C> <C> <C>
Revenues $59,551 $ 27,211 $ - $ 86,762
Operating Expenses:
General and Administrative Expense 35,155 18,140 - 53,295
Bad Debt Expense 2,343 432 - 2,775
Depreciation and Amortization Expense 6,819 4,766 1,164 (4) 12,749
Stock Based Compensation 1,604 - - 1,604
Loss on Sale of Stock of Subsidiary 389 - - 389
Loss on Settlement of Claim 125 - - 125
Compensation to Terminated Consultant 2,198 - - 2,198
------- -------- ------- --------
Total Operating Expenses 48,633 23,338 1,164 73,135
Income from Operations 10,918 3,873 (1,164) 13,627
Other Income [Expense]:
Interest Expense (5,587) (1,411) (2,556) (5) (9,554)
Interest and Other Income (Expense), net 1,417 (62) - 1,355
------- -------- ------- --------
Total Other [Expense] (4,170) (1,473) (2,556) (8,199)
Income Before Minority Interest, Provision
for Income Taxes and Extraordinary Item 6,748 2,400 (3,720) 5,428
Minority Interest in Income of Subsidiaries 1,178 73 - 1,251
Provision for Income Taxes 2,999 63 (1,022) (6) 2,040
------- -------- ------- --------
Income Before Extraordinary Item 2,571 2,264 (2,698) 2,137
Extraordinary Item - 382 - 382
------- -------- ------- --------
Net Income $ 2,571 $ 2,646 $(2,698) $ 2,519
------- -------- ------- --------
Earnings Per Common Share:
Primary:
Income Before Extraordinary Item $ 0.18 $ 0.15
Extraordinary Item $ - $ 0.03
Net Income $ 0.18 $ 0.18
Fully Diluted:
Income Before Extraordinary Item $ 0.15 $ 0.13
Extraordinary Item $ - $ 0.02
Net Income $ 0.15 $ 0.15
Weighted Average Number of Common Shares and
Common Share Equivalents Outstanding:
Primary 14,021,092 14,021,092
Fully Diluted 17,099,589 17,099,589
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
F-5
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<TABLE>
<CAPTION>
US DIAGNOSTIC INC. AND SUBSIDIARIES ("USDL") AND MEDICAL IMAGING CENTERS OF
AMERICA, INC.("MICA") CONDENSED CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
(UNAUDITED) YEAR ENDED DECEMBER 31, 1995
(In thousands, except per share data)
PRO FORMA
USDL MICA ADJUSTMENTS PRO FORMA
---- ---- ----------- ---------
<S> <C> <C> <C> <C>
Total Revenue $ 29,416 $46,537 $ - $ 75,953
Operating Expenses:
General and Administrative 19,485 31,006 - 50,491
Bad Debt Expense 577 1,059 - 1,636
Depreciation and Amortization 3,003 9,961 1,743 (4) 14,707
Stock Based Compensation 213 - - 213
Compensation to Terminated Consultant 138 - - 138
--------- ------- ------- ---------
Total Operating Expenses 23,416 42,026 1,743 67,185
Income from Operations 6,000 4,511 (1,743) 8,768
Other Income (Expense):
Interest Income 227 534 - 761
Interest Expense (1,276) (3,557) (3,408)(5) (8,241)
Other Income (Expense) (503) 4,134 - 3,631
Non-Cash Finance Charge (414) - - (414)
--------- ------- ------- ---------
Total Other Income (Expense) (1,966) 1,111 (3,408) (4,263)
Income Before Minority Interest, Provision
for Income Taxes and Extraordinary Item 4,034 5,622 (5,151) 4,505
Minority Interest in Income of Subsidiaries 280 (214) - 66
Provision (Benefit)for Income Taxes 729 180 (1,363)(6) (454)
--------- ------- ------- ---------
Income Before Extraordinary Item 3,025 5,656 (3,788) 4,893
Extraordinary Item 306 - - 306
--------- ------- ------- ---------
Net Income $ 3,331 $ 5,656 $(3,788) $ 5,199
--------- ------- ------- ---------
Earnings Per Common Share:
Primary:
Income Before Extraordinary Item $ 0.61 $ 0.98
Extraordinary Item $ 0.06 $ 0.06
Net Income $ 0.67 $ 1.04
Fully Diluted:
Income Before Extraordinary Item $ 0.57 $ 0.73
Extraordinary Item $ 0.03 $ 0.03
Net Income $ 0.60 $ 0.76
Weighted Average Number of Common Shares
and Common Share Equivalents Outstanding:
Primary 4,996,021 4,996,021
Fully Diluted 11,761,427 11,761,427
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
F-6
<PAGE>
US DIAGNOSTIC INC. AND SUBSIDIARIES ("USDL") AND MEDICAL IMAGING CENTERS OF
AMERICA, INC.("MICA") NOTES TO CONDENSED CONSOLIDATED PRO FORMA FINANCIAL
STATEMENTS (UNAUDITED) DECEMBER 31, 1995 AND SEPTEMBER 30, 1996
NOTE
----
(1) ADJUSTMENT TO REFLECT THE EXCESS OF THE PURCHASE PRICE OVER THE
ESTIMATED FAIR VALUE OF NET ASSETS ACQUIRED.
(2) ADJUSTMENT TO REFLECT THE SOURCE OF FUNDS USED TO CONSUMMATE
THE ACQUISITION.
(3) ADJUSTMENT TO ELIMINATE THE EQUITY ACCOUNTS OF MICA.
(4) ADJUSTMENT TO REFLECT THE AMORTIZATION OF THE EXCESS PURCHASE
PRICE OVER THE ESTIMATED FAIR VALUE OF NET ASSETS ACQUIRED.
(5) ADJUSTMENT TO REFLECT INTEREST EXPENSE ON THE FUNDS USED TO
CONSUMMATE THE ACQUISITION.
(6) ADJUSTMENT TO REFLECT THE TAX EFFECT OF INTEREST EXPENSE
(SEE NOTE 5).
F-7