EX-99.2 3 b75853aiexv99w2.htm EX-99.2 UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET OF AMICAS AS OF MARCH 31, 2009 exv99w2
Exhibit 99.2
AMICAS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
     On April 2, 2009, AMICAS, Inc. (“AMICAS”) completed its acquisition of Emageon Inc (“Emageon”). AMICAS acquired all of the outstanding shares of common stock of Emageon, at a price of $1.82 per share in cash. For the purpose of these unaudited pro forma condensed combined financial statements, the acquisition is assumed to have occurred as of January 1, 2008 with respect to the unaudited pro forma condensed combined statements of operations and as of March 31, 2009 with respect to the unaudited pro forma condensed combined balance sheet.
     The pro forma adjustments related to the acquisition are based on a preliminary purchase price allocation in accordance with Statement of Financial Accounting Standards No. 141(R) “Business Combinations” whereby the cost to acquire Emageon was allocated to the assets acquired and the liabilities assumed, based upon their estimated fair values. Actual adjustments will be based on the final purchase price and analyses of fair values of identifiable tangible and intangible assets and liabilities, and estimates of the useful lives of tangible and intangible assets, which will be completed after AMICAS completes its valuation and assessment process using all available data. The final purchase price allocation will be performed using estimated fair values as of the date of the acquisition. Differences between the preliminary and final purchase price allocations could have a material impact on the accompanying unaudited pro forma condensed combined financial statements and the future results of operations and financial position of AMICAS and subsidiaries.
     The unaudited pro forma condensed combined financial statements do not reflect the realization of any potential cost savings, or any related integration costs. Although AMICAS believes that certain cost savings may result from the acquisition, there can be no assurance that these cost savings will be achieved.
     The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and are not necessarily indicative of the consolidated financial position or results of operations in future periods or the results that actually would have been realized if the acquisition had been completed as of the dates indicated. As a result, the actual financial condition and results of operations of AMICAS following the acquisition may not be consistent with, or evident from, these pro forma financial statements. In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect AMICAS’s, financial condition or results of operations following the acquisition.
     For purposes of presenting the financial information, the historical financial information of AMICAS and Emageon is based on the year ended December 31, 2008 and the three months ended March 31, 2009.
     The financial information and accompanying notes should be read in conjunction with the historical consolidated financial statements and notes thereto of AMICAS included in our Annual Report on Form 10-K for the year ended December 31, 2008 and our previously filed Form 8-K, as well as the historical financial statements and notes thereto of Emageon included in its annual report on Form 10-K for the year ended December 31, 2008.

 


 

AMICAS, Inc. and subsidiaries
Unaudited Pro Forma Consolidated Combined Balance Sheet
March 31, 2009
                                         
                                    Pro Forma  
    AMICAS, Inc.     Emageon Inc.     Pro Forma             Total  
    (unaudited)     (unaudited)     Adjustments             (unaudited)  
ASSETS
                                       
CURRENT ASSETS
                                       
Cash and cash equivalents
  $ 44,076     $ 18,345     $ (39,043 )     (A )   $ 23,378  
Marketable securities
    12,502                             12,502  
Accounts receivable, less allowance
    9,654       11,288       593       (B )     21,535  
Inventories, net
          4,047       (2,042 )     (C )     2,005  
Prepaid expenses and other current assets
    2,671       4,436                       7,107  
 
                                 
 
                                       
TOTAL CURRENT ASSETS
    68,903       38,116                       66,527  
 
                                       
Property and equipment, net
    863       10,940       (817 )     (D )     10,986  
Goodwill
                684     (E )     684  
Acquired/developed software
    5,233       230       4,770     (E )     10,233  
Customer relationships
          3,290       810     (E )     4,100  
Trademarks/tradenames
    1,224             400     (E )     1,624  
Non compete
                500       (E )     500  
Other assets
    1,747       2,312       (500 )     (F )     3,559  
 
                                 
 
                                       
TOTAL ASSETS
  $ 77,970     $ 54,888                     $ 98,213  
 
                                 
 
                                       
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                       
 
                                       
CURRENT LIABILITIES
                                       
Accounts payable and accrued expenses
  $ 4,375     $ 7,923     $ (276 )     (G )   $ 12,022  
Accrued employee compensation and benefits
    1,252       1,704       517       (H )     3,473  
Deferred revenue, net of long-term portion
    15,551       18,826       (9,306 )     (G )     25,071  
 
                                 
TOTAL CURRENT LIABILITIES
    21,178       28,453                       40,566  
 
                                 
 
                                       
Deferred revenue, long-term portion
    930       2,245       (1,665 )     (G )     1,510  
Other long-term liabilities
          275                       275  
Unrecognized tax benefits
    1,406                             1,406  
 
                                       
COMMITMENTS AND CONTINGENCIES
                                       
 
                                       
SHAREHOLDERS EQUITY
                                       
Preferred stock
                                 
Common stock
    51       22       (22 )     (I )     51  
Additional paid-in capital
    231,477       130,632       (130,632 )     (I )     231,477  
Accumulated deficit
    (129,717 )     (107,698 )     107,698       (I )     (129,717 )
Accumulated other comprehensive income (loss):
    (2 )     730       (730 )     (I )     (2 )
Treasury stock
    (47,353 )     (271 )     271       (I )     (47,353 )
 
                                 
 
                                       
TOTAL STOCKHOLDERS EQUITY
    54,456       23,415                       54,456  
 
                                 
 
                                       
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $ 77,970     $ 54,888                     $ 98,213  
 
                                 
The accompanying notes are an integral part of the unaudited pro forma condensed combined financial
statements.

 


 

AMICAS, Inc. and subsidiaries
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2008
                                         
                                    Pro Forma  
                                    Total  
            Acquisition             12/31/2008  
    AMICAS, Inc.     Emageon Inc.     Adjustments             (unaudited)  
Revenues
  $ 50,353     $ 69,328                     $ 119,681  
 
                                       
Operating Expenses
                                       
Cost of revenues
    24,679       39,092       (893 )     (J )     62,878  
Selling, general, and administrative expenses
    20,512       24,916                       45,428  
Research and development
    8,657       17,170                       25,827  
Depreciation and amortization
    1,084       3,775       (1,904 )     (J )     2,955  
Other operating expenses
          5,547               5,547  
Impairment of goodwill
    27,313       21,577               48,890  
Impairment of other intangibles
    177                             177  
 
                                 
Total operating expenses
    82,422       112,077                       191,702  
 
                                       
Operating loss
    (32,069 )     (42,749 )                     (72,021 )
 
                                       
Interest income
    2,187       518       (1,308 )     (L )     1,397  
Interest expense
          (40 )                     (40 )
Loss on sale of investments
    (31 )                           (31 )
 
                                 
 
                                       
Loss before provision for income taxes
    (29,913 )     (42,271 )                     (72,695 )
Provision for income taxes
    158                             158  
 
                                 
 
                                       
Net loss
  $ (30,071 )   $ (42,271 )                   $ (70,853 )
 
                                 
 
                                       
Basic loss per share
  $ (0.77 )                           $ (1.82 )
 
                                   
 
                                       
Diluted loss per share
  $ (0.77 )                           $ (1.82 )
 
                                   
 
                                       
Weighted average shares outstanding — basic
    38,482                               38,482  
 
                                   
Weighted average shares outstanding — diluted
    38,482                               38,482  
 
                                   
The accompanying notes are an integral part of the unaudited pro forma condensed combined financial
statements.

 


 

AMICAS, Inc. and subsidiaries
Unaudited Pro Forma Consolidated Statement of Operations
For the Three Months Ended March 31, 2009
                                         
                                    Pro Forma  
                                    Total  
    AMICAS, Inc.     Emageon Inc.     Acquisition             3/31/2009  
    (unaudited)     (unaudited)     Adjustments             (unaudited)  
Revenues
  $ 11,271     $ 17,026                     $ 28,297  
 
                                       
Operating Expenses
                                       
Cost of revenues
    5,292       9,187       85       (J )     14,564  
Selling, general, and administrative expenses
    4,521       5,713                       10,234  
Research and development
    2,286       3,517                       5,803  
Depreciation and amortization
    185       747       (308 )     (J )     624  
Acquisition related and integration costs
    549                             549  
Other operating expenses
          7,310       (6,869 )     (K )     441  
 
                                 
Total operating expenses
    12,833       26,474                       32,215  
 
                                       
Operating loss
    (1,562 )     (9,448 )                     (3,918 )
 
                                       
Interest income, net
    447       45       (313 )     (L )     179  
 
                                 
 
Loss before provision for income taxes
    (1,115 )     (9,403 )                     (3,739 )
Provision for income taxes
    53                             53  
 
                                 
 
                                       
Loss before extraordinary item
    (1,168 )     (9,403 )                     (3,792 )
Extraordinary income
          9,000               9,000  
 
                                 
Net loss
  $ (1,168 )   $ (403 )                   $ 5,208
 
                                 
 
                                       
Basic loss per share
  $ (0.03 )                           $ 0.15
 
                                   
 
                                       
Diluted loss per share
  $ (0.03 )                           $ 0.15
 
                                   
 
                                       
Weighted average shares outstanding — basic
    35,195                               35,195  
 
                                   
Weighted average shares outstanding — diluted
    35,195                               35,195  
 
                                   
The accompanying notes are an integral part of the unaudited pro forma condensed combined financial
statements.

 


 

AMICAS, Inc. and subsidiaries
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
(1) Basis of Pro Forma Presentation
The unaudited pro forma condensed combined financial statements are based on the historical financial statements of AMICAS and Emageon after giving effect to the acquisition of Emageon and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial statements. AMICAS acquired all of the outstanding shares of Emageon and the transaction closed on April 2, 2009. The accompanying unaudited condensed combined balance sheet assumes the acquisition of Emageon occurred on March 31, 2009.
(2) Purchase Price Allocation
AMICAS acquired all of the outstanding shares of Emageon, a publicly held company based in Birmingham, Alabama. Under the terms of the merger agreement, Emageon stockholders received $1.82 per share in cash for each Emageon share.
This acquisition has been accounted for as a business combination in accordance with SFAS 141(R), “Business Combinations”. The total purchase price of approximately $39.0 million was paid in cash:
Purchase Price Allocation
The allocation of the total purchase price to Emageon’s net tangible and identifiable intangible assets was based on their estimated fair values as of April 2, 2009. The excess of the purchase price over the identifiable intangible and net tangible assets was allocated to goodwill. The total purchase price of approximately $39.0 million has been allocated as follows (in thousands):
         
Goodwill
  $ 684  
Intangible assets
    10,000  
Deferred revenue at fair value
    (10,100 )
Property and equipment at fair value
    10,123  
Tangible assets acquired and liabilities assumed:
       
Cash and cash equivalents
    18,345  
Other current assets
    18,322  
Non-current assets
    1,812  
Accounts payable and current liabilities
    (9,868 )
Other long-term liabilities
    (275 )
 
     
Total purchase price
    39,043  
 
     
The fair value of certain identified intangible assets are based upon preliminary estimates and are subject to change which could be material. The following are preliminary intangible assets acquired and their respective amortizable lives (in thousands):
                 
            Amortizable
Asset   Amount   life (years)
Customer relationships
  $ 4,100       9  
Acquired technology
    5,000       7  
Tradenames
    400       8  
Non competes
    500       9  

 


 

(3) Pro Forma Adjustments
The following describes the pro forma adjustments made to the accompanying unaudited pro forma condensed combined financial statements:
A.   To give effect to cash payment of approximately $39.0 million to acquire the shares of Emageon Inc.
 
B.   Adjustment to record the excess of future billings above and beyond the estimated fair value of deferred revenue.
 
C.   Adjustment to eliminate accumulated deferred costs associated with deferred revenue. These accumulated costs are being eliminated because they do not reflect an asset of AMICAS.
 
D.   Adjustment to record the fair value of property, plant and equipment.
 
E.   Adjustment to reflect the preliminary estimate of the fair value of amortizable intangible assets, and goodwill. Identified amortizable intangible assets include acquired software technology, customer relationships, trade names and non-compete agreements. The Company has assumed straight-line amortization periods ranging from 84 months to 108 months based on the estimated useful lives of the intangible assets.
 
F.   To reduce investment in subsidiary to fair value.
 
G.   To adjust deferred revenue to fair value and to eliminate an associated accrued liability.
 
H.   To adjust accrued commissions and accrued vacation liabilities to fair value.
 
I.   To eliminate shareholders equity of Emageon Inc. as of the acquisition date.
 
J.   Reduction of depreciation and amortization expense as a result of the adjustment of property, plant and equipment and intangibles to fair value.
 
K.   To eliminate the nonrecurring expenses related to Emageon’s Strategic Alternative Committee expenses related to the AMICAS acquisition.
 
L.   Adjustment to record foregone interest income earned on available cash and marketable securities used for the acquisition.
(4) Notes to historical Emageon financial statements
1.   Other operating expenses in the twelve months ended December 31, 2008 include $3,243 thousand of nonrecurring expenses incurred by the Strategic Alternative Committee related to the unsuccessful acquisition of Emageon.
 
2.   Impairment of goodwill in the twelve months ended December 31, 2008 includes $21.6 million related to Emageon Inc.
 
3.   Extraordinary income in the 3 months ended March 31, 2009 includes $9,000 thousand of extra-ordinary income from the break-up payment made by the unsuccessful acquirer of Emageon Inc.