<PAGE> 1
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): June 24, 1997
MEDIRISK, INC.
(Exact name of registrant
as specified in its charter)
Delaware 000-27056 58-2256400
- --------------------------------------------------------------------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
Two Piedmont Center, Suite 400, 3565 Piedmont Rd., Atlanta, Georgia 30305
- --------------------------------------------------------------------------------
(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code: (404) 364-6700
N/A
---------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
On June 24, 1997, Medirisk, Inc. (the "Company") completed the
acquisition of CIVS, Inc. ("CIVS"). The Company hereby amends its Current Report
on Form 8-K dated July 9, 1997 with respect to the acquisition of CIVS to
include the below-referenced financial statements and pro forma financial
information.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
CIVS, Inc.
<TABLE>
<CAPTION>
Audited:
--------
<S> <C>
Report of Independent Auditors............................................................. F-1
Balance Sheets as of December 31, 1996 and 1995.............................................F-2
Statements of Operations for the years ended December 31, 1996 and 1995.....................F-3
Statements of Stockholders' Equity (Deficit) for the years ended December 31,
1996 and 1995......................................................................F-4
Statements of Cash Flows for the years ended December 31, 1996 and 1995.....................F-5
Notes to Financial Statements...............................................................F-6
Unaudited:
----------
Balance Sheet as of March 31, 1997..........................................................F-11
Statements of Operations for the three months ended March 31, 1997 and 1996.................F-12
Statements of Cash Flows for the three months ended March 31, 1997 and 1996.................F-13
Notes to Unaudited Financial Statements.....................................................F-14
</TABLE>
(b) PRO FORMA FINANCIAL INFORMATION.
The assets and liabilities of CIVS were included in the balance sheet
of the Company included in the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997, as filed with the Securities and Exchange
Commission on August 14, 1997; therefore, no pro forma balance sheet is
presented. The following pro forma financial information relating to the Company
and CIVS is included herein:
<TABLE>
<S> <C>
Pro Forma Consolidated Condensed Statements of Operations
for the six-month period ended June 30, 1997 and for the year
ended December 31, 1996.......................................................F-15
Notes to Unaudited Pro Forma Consolidated Condensed
Statements of Operations......................................................F-16
</TABLE>
(c) EXHIBITS
None
-2-
<PAGE> 3
Report of Independent Auditors
Board of Directors and Stockholders
CIVS, Inc.
We have audited the accompanying balance sheets of CIVS, Inc. (formerly
Credential Information and Verification Services, Inc.) as of December 31, 1996
and 1995, and the related statements of operations, stockholders' equity
(deficit), and cash flows for the years then ended. 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 financial position of CIVS, Inc. (formerly Credential
Information and Verification Services, Inc.) at December 31, 1996 and 1995, and
the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles
/s/ Ernst & Young LLP
Vienna, Virginia
March 7, 1997
F-1
<PAGE> 4
CIVS, Inc.
(formerly Credential Information and Verification Services, Inc.)
Balance Sheets
<TABLE>
<CAPTION>
DECEMBER 31,
1996 1995
----------------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 145,070 $ 11,193
Accounts receivable 421,906 170,555
Deferred charges 101,218 38,606
Prepaid expenses and other current assets 13,973 2,410
----------------------
Total current assets 682,167 222,764
Equipment 297,246 114,721
Accumulated depreciation and amortization (80,782) (20,369)
----------------------
216,464 94,352
Deposits 16,968 16,822
----------------------
Total assets $ 915,599 $ 333,938
======================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Accounts payable and accrued expenses $ 159,278 $ 276,681
Deferred revenue 298,851 215,938
Current portion of capital lease obligations 22,896 8,042
Notes payable -- 50,000
----------------------
Total current liabilities 481,025 550,661
Capital lease obligations, net of current portion 75,136 32,671
Commitments -- --
Stockholders' equity (deficit):
Common stock, $.01 par value, 5,000 shares
authorized, 1,320 and 990 shares issued and
outstanding at December 31, 1996 and 1995,
respectively 13 10
Capital in excess of par value 512,665 22,325
Accumulated deficit (153,240) (271,729)
----------------------
Total stockholders' equity (deficit) 359,438 (249,394)
----------------------
Total liabilities and stockholders' equity (deficit) $ 915,599 $ 333,938
======================
</TABLE>
See accompanying notes.
F-2
<PAGE> 5
CIVS, Inc.
(formerly Credential Information and Verification Services, Inc.)
Statements of Operations
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1996 1995
--------------------------
<S> <C> <C>
Net revenues $ 2,647,624 $ 1,210,701
Costs and expenses:
Database operations and maintenance
services 752,775 487,883
License fees and royalties 61,728 33,829
Selling, general and administrative expenses 648,813 374,636
Salaries, wages and benefits 1,079,719 552,362
--------------------------
Income (loss) from operations 104,589 (238,009)
Interest and other income 13,900 4,026
--------------------------
Net income (loss) $ 118,489 $ (233,983)
==========================
</TABLE>
See accompanying notes.
F-3
<PAGE> 6
CIVS, Inc.
(formerly Credential Information and Verification Services, Inc.)
Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
CAPITAL IN
COMMON STOCK EXCESS OF ACCUMULATED
SHARES PAR VALUE PAR DEFICIT TOTAL
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1994 1,018 $ 10 $ 22,325 $ (15,746) $ 6,589
Repurchase of common stock (28) -- -- -- --
Distribution to stockholders -- -- -- (22,000) (22,000)
Net loss -- -- -- (233,983) (233,983)
-------------------------------------------------------
Balance at December 31, 1995 990 10 22,325 (271,729) (249,394)
Issuance of common stock 330 3 490,340 -- 490,343
Net income -- -- -- 118,489 118,489
-------------------------------------------------------
Balance at December 31, 1996 1,320 $ 13 $ 512,665 $(153,240) $ 359,438
=======================================================
</TABLE>
See accompanying notes.
F-4
<PAGE> 7
CIVS, Inc.
(formerly Credential Information and Verification Services, Inc.)
Statements of Cash Flows
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1996 1995
----------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 118,489 $(233,983)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 60,413 18,051
Changes in operating assets and liabilities:
Accounts receivable (251,351) (169,289)
Deferred charges (62,612) (19,651)
Prepaid expenses and other current assets (11,563) (2,410)
Deposits (146) (16,822)
Accounts payable and accrued expenses (117,403) 248,345
Deferred revenue 82,913 158,826
----------------------
Net cash used in operating activities (181,260) (16,933)
INVESTING ACTIVITIES
Purchases of equipment (111,210) (58,806)
----------------------
Net cash used in investing activities (111,210) (58,806)
FINANCING ACTIVITIES
Proceeds from (payments on) notes payable (50,000) 50,000
Distributions to stockholders -- (22,000)
Proceeds from (payments on) capital lease obligations (13,996) (3,919)
Net proceeds from issuance of common stock 490,343 --
----------------------
Net cash provided by financing activities 426,347 24,081
Net increase (decrease) in cash and cash equivalents 133,877 (51,658)
Cash and cash equivalents at beginning of year 11,193 62,851
----------------------
Cash and cash equivalents at end of year $ 145,070 $ 11,193
======================
</TABLE>
See accompanying notes.
F-5
<PAGE> 8
CIVS, Inc.
(formerly Credential Information and Verification Services, Inc.)
Notes to Financial Statements
December 31, 1996 and 1995
1. ORGANIZATION
CIVS, Inc. (formerly Credential Information and Verification Services, Inc.),
(the "Company"), a Maryland-based company, was organized in October of 1991 to
provide electronic primary source verification for health care providers'
credentials to managed care organizations, hospitals and the health care
insurance industry. During 1996, the Company changed its name to CIVS, Inc.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of three
months or less at the time of purchase to be cash equivalents.
INCOME TAXES
The Company has elected by unanimous consent of its stockholders to be taxed
under the provisions of Subchapter S of the Internal Revenue Code. Under those
provisions, the Company does not pay corporate income taxes on its taxable
income. Instead, the stockholders include their share of the Company's net
income (loss) in their individual tax returns.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Depreciation and amortization of
property and equipment are computed on a straight-line basis over the estimated
useful lives, which varies between three and five years.
F-6
<PAGE> 9
CIVS, Inc.
(formerly Credential Information and Verification Services, Inc.)
Notes to Financial Statements (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
DIVIDENDS
The Company has not paid dividends to stockholders of its common stock and any
dividends that may be paid in the future will depend upon the financial
requirements of the Company and other relevant factors. The Company has made
distributions to its stockholders to assist in meeting their Subchapter S tax
liabilities.
DEFERRED CHARGES
Deferred charges represent costs related to contracts whose related revenue will
be recognized in subsequent periods in accordance with the Company's revenue
recognition policy. Based on the pricing mechanisms and expected costs under
these contracts, management believes that future revenues will be sufficient to
absorb the deferred costs. These capitalized costs will be amortized as the
related revenue is earned from each contract, generally over a thirty to ninety
day period.
REVENUE RECOGNITION
Revenues related to application processing services are recorded when the
applications are processed and revenues related to credentialing services are
recorded as credential verification reports are delivered to customers. The
Company accounts for each project (duration of usually two to four months) using
the completed contract method. Provisions for anticipated losses are made in the
period in which they first become determinable.
Deferred revenue represents payments received in advance of the performance of
credentialing services.
STOCK-BASED COMPENSATION
During 1996, the Company adopted Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation" (SFAS No. 123). The provisions of
SFAS No. 123 allow companies to either expense the estimated fair value of stock
options or to continue to follow the intrinsic value method set forth in APB
Opinion 25, "Accounting for Stock Issued to Employees" (APB 25) but disclose the
pro forma effects on net income (loss) had the fair value of the options been
expensed. The Company has elected to continue to apply APB 25 in accounting for
its stock option incentive plan. See Note 9 to the financial statements for
further information.
F-7
<PAGE> 10
CIVS, Inc.
(formerly Credential Verification and Information Services, Inc.)
Notes to Financial Statements (Continued)
3. OPERATING LEASES
The Company leases office space in Rockville, Maryland under the terms of a
lease which terminates on March 31, 2001. Rent expense for the years ending
December 31, 1996 and 1995 amounted to $95,708 and $52,367, respectively. The
Company's future minimum lease commitments under noncanceleable operating leases
are as follows:
<TABLE>
<S> <C>
1997 $122,216
1998 125,882
1999 129,659
2000 133,548
2001 137,554
--------
$648,859
========
</TABLE>
4. CAPITAL LEASES
At December 31, 1996 and 1995, the cost of the equipment recorded under capital
leases amounted to $115,947 and $44,632, respectively. Accumulated amortization
related to capital leases was $23,753 and $5,163 at December 31, 1996 and 1995,
respectively.
The present value of future minimum lease payments under capital leases as of
December 31, 1996 is as follows:
<TABLE>
<S> <C>
1997 $ 34,976
1998 34,976
1999 29,085
2000 18,013
Thereafter 8,400
--------
Total 125,450
Less amount representing interest 27,418
--------
Present value of minimum lease payments 98,032
Less current portion 22,896
--------
Obligations under capital leases, net of
current portion $ 75,136
========
</TABLE>
The non-cash portion of the capital lease transaction is excluded from the
statements of cash flows. Amortization expense related to capital leased
equipment is included in depreciation and amortization expense in the statements
of cash flows.
F-8
<PAGE> 11
CIVS, Inc.
(formerly Credential Verification and Information Services, Inc.)
Notes to Financial Statements (Continued)
5. NOTES PAYABLE
During 1995, the Company executed two notes payable agreements totaling $50,000
with two individuals whereby the principal amount was payable in sixty days
(February, 1996). During 1996, the balance plus accrued interest was repaid.
6. FINANCING TRANSACTION
During 1996, the Company sold 330 shares of common stock to a group of four
private investors, which netted the Company approximately $490,000 in total
proceeds.
7. MAJOR CUSTOMERS
During 1996, two customers accounted for approximately 46% of the Company's net
revenues. During 1995, three customers accounted for approximately 58% of the
Company's net revenues.
8. RETIREMENT PLAN
The Company has adopted a 401(k) Plan (the "Plan"). The Plan, which covers all
employees who have completed 12 months and 1,000 hours of service, stipulates
that employees may elect an amount up to the maximum allowable under IRS
guidelines to contribute to the Plan. Additionally, the Company's Board of
Director's approves Company contributions to match 20% of employee
contributions. Contributions were made by the Company in the amount of $4,698
and $2,884 during the years ended December 31, 1996 and 1995, respectively.
9. STOCK OPTION PLAN
The Company applies APB 25 in accounting for its stock option incentive plan
and, accordingly, recognizes compensation expense for the difference between the
fair value of the underlying common stock and the grant price of the option at
the date of grant. The effect of applying SFAS No. 123 on 1996 pro forma net
income as stated above is not necessarily representative of the effects on
reported net income for future years due to, among other things, (1) the vesting
period of the stock options and (2) the fair value of additional stock options
in future years. Had compensation cost for the Company's stock option plan been
determined based upon the fair value at the grant date for awards under the plan
consistent with the methodology prescribed under SFAS No. 123, the Company's
F-9
<PAGE> 12
CIVS, Inc.
(formerly Credential Verification and Information Services, Inc.)
Notes to Financial Statements (Continued)
9. STOCK OPTION PLAN (CONTINUED)
net income for 1996 would not be materially different from the reported amount.
The 1996 Stock Option Plan (the "1996 Plan") provides for the granting of
options to purchase up to 70 shares of the Company's common stock, at a price,
for the incentive options, not less than the fair market value of the common
stock on the date of grant. The vesting period of the options is determined by
the Board of Directors and is generally three years. Outstanding options expire
after ten years.
Additional information with respect to 1996 Stock Option activity is summarized
as follows:
<TABLE>
<CAPTION>
Weighted-
Average
Exercise
Shares Price
------ ---------
<S> <C> <C>
Outstanding at beginning of year - -
Options granted 33 $1,912
Options exercised - -
Options canceled or expired - -
------ ------
Outstanding at end of year 33 $1,912
====== ======
Options exercisable at year-end - -
====== ======
</TABLE>
At December 31, 1996, thirty-seven options were available for future grant.
F-10
<PAGE> 13
CIVS, INC.
UNAUDITED BALANCE SHEET
<TABLE>
<CAPTION>
(Amounts in thousands) MARCH 31, 1997
<S> <C>
Current assets
Cash and cash equivalents $ 124
Accounts receivable, net 261
Prepaid expenses 12
Other current assets 97
-------
Total current assets 494
Property and equipment, net 248
Other assets 21
-------
Total assets $ 763
=======
Current liabilities
Accounts payable $ 150
Accrued expenses 178
Long-term debt and obligations under capital leases 28
Deferred revenue 193
-------
Total current liabilities 549
Long-term debt and obligations under capital leases 75
-------
Total liabilities 624
Total stockholders' equity 139
------
139
Total liabilities and stockholders' equity $ 763
=======
</TABLE>
See accompanying notes to unaudited financail statements.
F-11
<PAGE> 14
CIVS, INC
UNAUDITED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(Amounts in thousands)
THREE MONTHS
ENDED MARCH 31,
-----------------
1997 1996
---- ----
<S> <C> <C>
Revenue $ 663 $ 455
Salaries, wages and benefits 486 238
Other operating expenses 378 296
Depreciation and amortization 23 9
------- ------
Operating loss (224) (88)
Interest income(expense), net (1) 2
------- ------
Net loss $ (225) $ (86)
======= ======
</TABLE>
See accompanying notes to unaudited financial statements.
F-12
<PAGE> 15
CIVS, INC.
UNAUDITED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(Amounts in thousands)
THREE MONTHS
ENDED MARCH 31,
------------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (225) $ (86)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization 23 9
Decrease (increase) in:
Accounts receivable 161 57
Other assets 3 (50)
Increase (decrease) in:
Accounts payable 47 (31)
Accrued expenses and other liabilities 121 (19)
Deferred revenue (101) 51
------- -----
Net cash provided by (used in) operating activities 29 (69)
------- -----
Cash flows from investing activities:
Purchases of property and equipment (45) (35)
------- -----
Net cash used in investing activities (45) (35)
------- -----
Cash flows from financing activities:
Proceeds from issuance of common stock -- 490
Payments on long-term debt and obligations under capital leases (5) (50)
------- -----
Net cash provided by (used in) financing activities (5) 440
------- -----
Net increase (decrease) in cash and cash equivalents (21) 336
Cash and cash equivalents at beginning of period 145 11
------- -----
Cash and cash equivalents at end of period $ 124 $ 347
======= =====
</TABLE>
See accompanying notes to unaudited financial statements.
F-13
<PAGE> 16
CIVS, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(1) Basis of Presentation
These unaudited financial statements include the financial position
and results of operations of CIVS, Inc. as of March 31, 1997 and for
the three months ended March 31, 1997 and 1996.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for the fair presentation of
the unaudited financial statements of CIVS, Inc. as of March 31, 1997
and for the three months ended March 31, 1997 and 1996 have been
included. Operating results for the three-month period ended March
31, 1997 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1997.
F-14
<PAGE> 17
MEDIRISK, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(Amounts in thousands except per share amounts)
SIX MONTHS ENDED JUNE 30, 1997
---------------------------------------------------------------------
HISTORICAL
-------------------------------- PRO FORMA PRO FORMA
MEDIRISK, INC. CIVS ADJUSTMENTS CONSOLIDATED
-------------- ------ ----------- ------------
<S> <C> <C> <C> <C>
(1)
Revenue $5,893 $1,119 $ -- $ 7,012
Salaries, wages and benefits 3,480 844 -- 4,324
Other operating expenses 1,539 761 -- 2,300
Depreciation and amortization 450 40 64(2) 554
Acquired in-process research and development costs 3,100 -- (3,100)(3) --
------ ------ ------ -------
Operating income(loss) (2,676) (526) 3,036 (166)
Interest income(expense), net 197 (2) (115)(4) 80
------ ------ ------ -------
Net income(loss) before extraordinary item (2,479) (528) 2,921 (86)
Extraordinary item - Loss on early extinguishment of debt (806) -- -- (806)
------ ------ ------ -------
Net loss (3,285) (528) 2,921 (892)
Series A and Series B convertible preferred stock
dividend requirement (25) -- -- (25)
------ ------ ------ -------
Net loss attributable to common stock (3,310) (528) 2,921 (917)
====== ====== ====== ========
Net loss per share of common stock $(0.90) $ (0.24)
Weighted average number of common shares outstanding 3,658 3,773(5)
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
-----------------------------------------------------------------
HISTORICAL
------------------------- PRO FORMA PRO FORMA
MEDIRISK, INC. CIVS ADJUSTMENTS CONSOLIDATED
-------------- ----- --------------- --------------
<S> <C> <C> <C> <C>
(6)
Revenue $ 8,904 $ 2,648 $ -- $ 11,552
Salaries, wages and benefits 6,093 1,218 -- 7,311
Other operating expenses 2,314 1,256 -- 3,570
Depreciation and amortization 787 60 154(2) 1,001
Acquired in-process research and development costs 6,180 -- -- 6,180
------- ------- ---- ---------
Operating income(loss) (6,470) 114 (154) (6,510)
Interest income(expense), net (703) 4 (277)(4) (976)
Other expense (57) -- -- (57)
------- ------- ---- ---------
Net loss (7,230) 118 (431) (7,543)
Series A and Series B convertible preferred stock
dividend requirement (202) -- -- (202)
------- ------- ---- ---------
Net loss attributable to common stock (7,432) 118 (431) (7,745)
======= ======= ==== =========
Net loss per share of common stock
$ (3.56) $ (3.50)
Weighted average number of common shares outstanding 2,087 2,216(5)
</TABLE>
See accompanying notes to unaudited pro forma consolidated condensed Statements
of Operations.
F-15
<PAGE> 18
MEDIRISK, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
Effective as of June 1, 1997 Medirisk, Inc. (the "Company") acquired
all of the shares of CIVS, Inc., a Rockville, Maryland-based provider of
credentialling services to hospitals and managed care organizations, for $3.5
million in cash and 129,166 shares of the Company's Common Stock at a price of
$7.50 per share. The Company recorded the acquisition using the purchase
method of accounting with $3.1 million of the purchase price allocated to
acquired in-process research and development costs and charged to the
consolidated statement of operations in June 1997. During the remainder of
1997, Medirisk expects to incur nonrecurring charges of approximately $300,000
for planned integration costs.
The unaudited pro forma consolidated condensed statements of operations
for the year ended December 31, 1996 and the six months ended June 30, 1997
illustrate the estimated effects of the acquisition had it occurred as of the
beginning of the periods presented.
The unaudited pro forma consolidated condensed statements of
operations have been prepared using the purchase method of accounting, whereby
the total cost of the acquisition is allocated to the tangible and intangible
assets acquired and liabilities assumed based upon their respective fair values
at the effective date of such acquisition. For purpose of the unaudited pro
forma consolidated condensed statements of operations, such allocations have
been made based upon currently available information and management's
estimates.
The historical statements of operations are derived from the audited
financial statements of the Company and CIVS, Inc. for the year ended December
31, 1996 and the unaudited financial statements of the Company and CIVS, Inc.
for the six months ended June 30, 1997.
The unaudited pro forma consolidated condensed statements of
operations do not purport to represent what the results of operations of the
Company would actually have been if the acquisition had occurred on such dates
or to project the results of operations of the Company for any future date or
period. The unaudited pro forma consolidated condensed statements of operations
should be read together with the Financial Statements and Notes thereto of the
Company and CIVS, Inc. The unaudited pro forma consolidated condensed
statements of operations reflect the following adjustments:
(1) Reflects the historical operating results of CIVS, Inc. for the five months
ended May 31, 1997. The operating results of CIVS, Inc. for June 1997 are
included in the Company's operating results.
(2) Reflects the additional amortization of intangible assets recorded as a
result of the allocation of the purchase price. These intangible assets and
their lives are as follows:
<TABLE>
<S> <C> <C>
Goodwill $1,072,000 15 years
Technological Know-how $ 415,000 5 years
</TABLE>
(3) Reflects the reversal of the nonrecurring acquired in-process research and
development costs incurred in the acquisition of CIVS, Inc. This charge was
included in the June 30, 1997 historical statement of operations and is
being excluded from the six months ended June 30, 1997 pro forma statement
of operations.
(4) Reflects interest expense on the cash payment of $3.5 million to fund the
acquisition of CIVS, Inc. at the rate of 8% per annum.
(5) Reflects the increased shares of common stock outstanding resulting from
the acquisition of CIVS, Inc.
(6) Reflects the historical operating results of CIVS, Inc. for the year ended
December 31, 1996. Certain amounts have been reclassified to conform to the
Company's basis of presentation.
F-16
<PAGE> 19
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.
MEDIRISK, INC.
By: /s/ Kenneth M. Goins, Jr.
-------------------------------
Kenneth M. Goins, Jr.
Executive Vice President
Chief Financial Officer
Dated: September 4, 1997
-3-
