-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q1iww5xwFO3vLd6SFHqeg681rHvR0M3rRRB7bCWSyevifptdUhS3TT6G66mGWpH5 1bbfEBWUoW+ZpKboyliP3w== 0001047469-98-006986.txt : 19980220 0001047469-98-006986.hdr.sgml : 19980220 ACCESSION NUMBER: 0001047469-98-006986 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971210 ITEM INFORMATION: FILED AS OF DATE: 19980219 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: HORIZON PHARMACIES INC CENTRAL INDEX KEY: 0001036260 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DRUG STORES AND PROPRIETARY STORES [5912] IRS NUMBER: 752441557 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-22403 FILM NUMBER: 98545821 BUSINESS ADDRESS: STREET 1: 275 W PRINCETON DR CITY: PRINCETON STATE: TX ZIP: 75407 BUSINESS PHONE: 9727362424 MAIL ADDRESS: STREET 1: 275 WEST PRINCETON DRIVE CITY: PRINCETON STATE: TX ZIP: 75407 8-K/A 1 FORM 8-K/A - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A AMENDMENT NO. 1 TO CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): December 10, 1997 HORIZON PHARMACIES, INC. (Exact name of registrant as specified in its charter) TEXAS 0-22403 75-2441557 (State or other jurisdiction of (Commission (I.R.S. Employer incorporation or organization) File Number) Identification No.) 275 W. PRINCETON DRIVE PRINCETON, TEXAS 75407 (Address of Principal Executive Offices) (Zip Code) (972) 736-2424 (Registrant's telephone number, including area code) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED. Filed herewith as a part of this report are the following financial statements for Mart Super Drug: (i) audited Balance Sheet at December 31, 1996 and audited Statement of Income, Statement of Partners' Equity and Statement of Cash Flows each for the year ended December 31, 1996, and the report of Howard & Waltrip, P.C., certified public accountants, thereon, together with the notes thereto; and (ii) unaudited Balance Sheet at September 30, 1997, and unaudited Statements of Income, unaudited Statements of Partners' Equity and unaudited Statements of Cash Flows, each for the nine months ended September 30, 1997 and September 30, 1996. These financial statements are being filed in accordance with and within the time provided for in Item 7(a)(4). (b) PRO FORMA FINANCIAL INFORMATION. Filed herewith as a part of this report are HORIZON Pharmacies, Inc.'s (the "Registrant") Pro Forma Combined Condensed Balance Sheet at September 30, 1997 and Pro Forma Combined Condensed Statement of Income for the nine months ended September 30, 1997 and the year ended December 31, 1996, and the notes thereto. These pro forma financial statements are being filed in accordance with and within the time provided for in Item 7(a)(4). (c) EXHIBITS. The following exhibits are filed with this report: Exhibit No. Name of Exhibit ----------- --------------- 23 Consent of Howard & Waltrip, P.C., Independent Auditors (filed electronically herewith). -2- MART SUPER DRUG FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 1996 WITH REPORT OF INDEPENDENT AUDITORS INDEX TO FINANCIAL STATEMENTS FINANCIAL STATEMENTS OF MART SUPER DRUG. Report of Independent Auditors ......................................... F-2 Balance Sheets at December 31, 1996 and September 30, 1997 (unaudited).. F-3 Statements of Income for the year ended December 31, 1996 and for the nine months ended September 30, 1996 (unaudited) and September 30, 1997 (unaudited)....................................................... F-4 Statements of Partners' Equity for the year ended December 31, 1996 and for the nine months ended September 30, 1996 (unaudited) and September 30, 1997 (unaudited)......................................... F-5 Statements of Cash Flows for the year ended December 31, 1996 and for the nine months ended September 30, 1996 (unaudited) and September 30, 1997 (unaudited)....................................................... F-6 Notes to Financial Statements........................................... F-7 PRO FORMA COMBINED FINANCIAL DATA OF HORIZON PHARMACIES, INC............... F-8 Pro Forma Combined Condensed Balance Sheet at September 30, 1997........ F-9 Pro Forma Combined Condensed Statement of Income for the nine months ended September 30, 1997............................................... F-10 Pro Forma Condensed Statement of Income for the year ended December 31, 1996................................................................... F-11 Adjustments to Pro Forma Financial Statements........................... F-12 [LETTERHEAD] The Partners of Mart Super Drug January 29, 1998 REPORT OF INDEPENDENT AUDITORS We have audited the accompanying balance sheet of Mart Super Drug as of December 31, 1996, and the related statement of income, partners' equity and cash flows for the year 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 audit. We conducted our audit 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 audit provides 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 Mart Super Drug at December 31, 1996, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. Howard & Waltrip, P.C. Certified Public Accountants Dallas, Texas F-2 MART SUPER DRUG BALANCE SHEETS DECEMBER 31, SEPTEMBER 30, ASSETS 1996 1997 ------------ ------------- (Unaudited) Current assets: Cash $ 77,967 $ 88,773 Accounts receivable-trade 31,014 31,285 Inventories, lower of cost or market 164,567 155,095 Prepaid expenses 0 889 -------- -------- Total current assets 273,548 276,042 Fixed assets: Furniture and Equipment 23,310 23,310 Automobile 9,528 9,528 Accumulated depreciation (18,331) (20,998) -------- -------- Total net fixed assets 14,507 11,840 -------- -------- TOTAL ASSETS $288,055 $287,882 -------- -------- -------- -------- LIABILITIES AND PARTNERS' EQUITY Liabilities Accounts payable-trade 64,875 59,493 Payroll taxes payable 2,723 3,192 Accrued expenses 1,938 2,211 -------- -------- Total liabilities 69,536 64,896 Partners' equity 218,519 222,986 -------- -------- TOTAL LIABILITIES AND PARTNERS' EQUITY $288,055 $287,882 -------- -------- -------- --------
F-3 See accompanying notes. MART SUPER DRUG STATEMENTS OF INCOME NINE MONTHS ENDED YEAR ENDED SEPTEMBER 30, DECEMBER 31, ------------------------- 1996 1996 1997 ------------ ---------- ---------- (Unaudited) Net sales $1,605,809 $1,184,826 $1,272,506 Cost of sales 1,236,862 930,062 977,105 ---------- ---------- ---------- Gross profit 368,947 254,764 295,401 ---------- ---------- ---------- Operating expenses: Selling, general and administrative 287,413 211,899 232,851 Depreciation 2,365 1,654 2,667 ---------- ---------- ---------- Total operating expenses 289,778 213,553 235,518 Income from operations 79,169 41,211 59,883 Other income (expense): Other income 2,865 2,182 2,630 Contributions (87) (73) (600) ---------- ---------- ---------- Total other income (expense) 2,778 2,109 2,030 ---------- ---------- ---------- Net income $ 81,947 $ 43,320 $ 61,913 ---------- ---------- ---------- ---------- ---------- ----------
F-4 See accompanying notes. MART SUPER DRUG STATEMENTS OF PARTNERS' EQUITY NINE MONTHS ENDED YEAR ENDED SEPTEMBER 30, DECEMBER 31, ----------------------- 1996 1996 1997 ------------ -------- -------- (Unaudited) Balance, Beginning of period $189,894 $189,894 $218,519 Partner withdrawals (53,322) (43,329) (57,446) Net income 81,947 43,320 61,913 -------- -------- -------- Balance, End of Period $218,519 $189,885 $222,986 -------- -------- -------- -------- -------- --------
F-5 See accompanying notes. MART SUPER DRUG STATEMENTS OF CASH FLOWS NINE MONTHS ENDED YEAR ENDED SEPTEMBER 30, DECEMBER 31, --------------------- 1996 1996 1997 ------------ -------- -------- (Unaudited) Operating activities: Net income $ 81,947 $ 43,320 $ 61,913 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 2,365 1,654 2,667 Change in operating assets and liabilities: Accounts receivable-trade (6,518) (21,187) (271) Inventories (18,662) 0 9,472 Prepaid expenses 0 0 (889) Accounts payable-trade 16,124 6,562 (5,382) Payroll taxes payable 716 331 469 Accrued expenses (214) (891) 273 -------- -------- -------- Net cash provided by operating activities 75,758 29,788 68,252 Investing activities: Purchase of fixed assets (6,688) 0 0 Financing activities: Partner withdrawals (53,322) (43,329) (57,446) -------- -------- -------- Net increase (decrease) in cash 15,748 (13,541) 10,806 Cash at beginning of period 62,219 62,219 77,967 -------- -------- -------- Cash at end of period $ 77,967 $ 48,678 $ 88,773 -------- -------- -------- -------- -------- -------- Supplemental disclosure of interest paid $ 0 $ 0 $ 0 -------- -------- -------- -------- -------- --------
F-6 See accompanying notes. MART SUPER DRUG NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 1. Summary of significant accounting policies Organization MART SUPER DRUG, a partnership between Scott S. Spencer and Jacques Jett, (the "Company"), owns and operates a retail pharmacy in Brookfield, Missouri. Basis of accounting The accompanying financial statements are prepared on the accrual basis of accounting and accordingly reflect revenues at the time products are sold or services rendered. Expenses are recognized when the products are received or the services are performed. 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 amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates, and such differences may be material to the financial statements. Depreciation Depreciation of fixed assets is provided on a straight-line basis over the estimated useful lives of the assets. Unaudited financial statements The accompanying unaudited financial statements include all adjustments, consisting of normal, recurring accruals, which the Company considers necessary for a fair presentation of the financial position and the results of operations for the indicated periods. 2. Leases The Company leases the retail store facilities under an operating lease which is scheduled to expire November 30, 1998. The monthly lease payments are $650 and the annual rent for 1996 was $7,800. 3. Subsequent events On December 10, 1997 the Company sold a majority of its assets to HORIZON Pharmacies, Inc. and ceased operations. F-7 PRO FORMA COMBINED FINANCIAL DATA The following unaudited Pro Forma Combined Condensed Statements of Income for the year ended December 31, 1996 and the nine months ended September 30, 1997 reflect the historical results of operations of the Company, adjusted to give effect to the acquisition of Mart Super Drug (the "Brookfield Store") in December 1997 as though such store was acquired January 1, 1996. The Pro Forma Combined Condensed Balance Sheet as of September 30, 1997 reflects the historical financial position of the Company as of that date, adjusted to give pro forma effect to the acquisition of the Brookfield Store as if it had occurred as of September 30, 1997. The pro forma adjustments are based upon available information and assumptions that management of the Company believes are reasonable and fairly reflect all expenses associated with the acquired business. The Pro Forma Combined Financial Data do not purport to represent the financial position or results of operations which would have occurred had such transactions been consummated on the dates indicated or the Company's financial position or results of operations for any future date or period. These Pro Forma Combinded Condensed Financial Statements and notes thereto should be read in conjunction with the historical financial statements and notes of the Company and the financial statements of the Brookfield Store. F-8 HORIZON PHARMACIES, INC. PRO FORMA COMBINED CONDENSED BALANCE SHEET SEPTEMBER 30, 1997 (IN THOUSANDS) ASSETS Company Brookfield Historical Store (Note) Pro Forma -------------------------------------- Current assets: Cash $ 1,272 $ 1,272 Accounts receivable 3,087 $ 30 3,117 Inventories 6,435 208 6,643 Prepaid expenses 93 0 93 -------------------------------------- Total current assets 10,887 238 11,125 Property and equipment, net 1,069 20 1,089 Intangibles, net 1,782 68 1,850 -------------------------------------- Total assets $ 13,738 $ 326 $ 14,064 -------------------------------------- -------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Bank Overdraft $ 0 $ 120 $ 120 Accounts payable 2,132 2,132 Accrued liabilities 549 549 Notes payable 347 347 Current portion of long-term obligations 575 23 598 -------------------------------------- Total current liabilities 3,603 143 3,746 Long-term obligations 2,764 183 2,947 Deferred income taxes 149 149 Shareholders' equity: Common stock 25 25 Additional paid-in capital 7,061 7,061 Retained earnings 136 136 -------------------------------------- Total shareholders' equity 7,222 7,222 -------------------------------------- Total liabilities and shareholders' equity $ 13,738 $ 326 $ 14,064 -------------------------------------- --------------------------------------
- -------------- Note: The Brookfield Store was acquired in December 1997 for a total consideration of $326 financed by a note payable of $206 and cash of $120 and is included herein at the values allocated to assets acquired. F-9 HORIZON PHARMACIES, INC. PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME NINE MONTHS ENDED SEPTEMBER 30, 1997 (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) Historical ------------------------ Brookfield Pro Forma Company Store Adjustments Pro Forma --------------------------------------- --------- Net sales $17,940 $1,273 $ 19,213 Cost and expenses: Cost of sales 12,177 977 13,154 Depreciation and amortization 205 3 $ (3)(1) 213 8 (1) Selling, general and administrative 4,869 231 (45)(3) 5,058 3 (5) --------------------------------- --------- Total costs and expenses 17,251 1,211 (37) 18,425 --------------------------------- --------- Income from operations 689 62 37 788 Interest expense and other, net 176 12 (3) 188 --------------------------------- --------- Income before income taxes 513 62 25 600 Provision for income taxes: Current 59 59 Deferred 149 149 Pro forma provision for income taxes 111 0 30 (6) 144 --------------------------------- --------- Net income $ 194 $ 62 $ (5) $ 251 ------------------------------------------------------ ------------------------------------------------------ Net income per share $ 0.11 --------- --------- Shares used in computation (A) 2,321,265 --------- ---------
(A) Weighted average shares outstanding have been adjusted to show the 3 for 2 stock split which occurred on November 24, 1997. F-10 HORIZON PHARMACIES, INC. PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME YEAR ENDED DECEMBER 31, 1996 (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) Historical ----------------------- Brookfield Pro Forma Company Store Adjustments Pro Forma ------------------------------------- ---------- Net sales $ 13,136 $ 1,606 $ 14,742 Cost and expenses: Cost of sales 8,942 1,237 10,179 Depreciation and amortization 172 2 $ (2)(1) 182 10 (1) Selling, general and administrative 3,471 285 (52)(3) 3,707 3 (5) --------------------------------- ---------- Total costs and expenses 12,585 1,524 (41) 14,068 --------------------------------- ---------- Income from operations 551 82 41 674 Interest expense and other, net 249 0 16 (2) 265 --------------------------------- ---------- Income before income taxes 302 82 25 409 Pro forma provision for income taxes 106 0 37 (6) 143 --------------------------------- ---------- Pro forma net income $ 196 $ 82 $(12) $ 266 -------------------------------------------------- -------------------------------------------------- Pro forma net income per share $ 0.17 ---------- ---------- Shares used in computation (A) 1,611,369 ---------- ----------
(A) Weighted average shares outstanding have been adjusted to show the 3 for 2 stock split which occurred on November 24, 1997. F-11 ADJUSTMENTS TO PRO FORMA FINANCIAL STATEMENTS (1) Adjust depreciation and amortization of acquired equipment and intangibles to reflect new basis in the acquired store: Eliminate historical depreciation: Twelve months ended December 31, 1996: $ 2,000 Nine months ended September 30, 1997: 3,000 Provide depreciation and amortization on acquired bases in equipment and intangibles: Equipment - 7 year life - purchase price allocated 20,000 Intangibles - 5 to 20 year life - purchase price allocated 68,000 Twelve months ended December 31, 1996: Depreciation of equipment 4,000 Amortization of intangibles 6,000 -------- Total 10,000 Nine months ended September 30, 1997: Depreciation of equipment 3,000 Amortization of intangibles 5,000 -------- Total 8,000 (2) Adjust interest expense: Eliminate historical interest expense: Twelve months ended December 31, 1996: 0 Nine months ended September 30, 1997: 0 Provide for interest expense on debt issued in acquisition: Debt 206,000 Interest Rate 8.00% Twelve months ended December 31, 1996: 16,000 Nine months ended September 30, 1997: 12,000 (3) Decrease previous Officer Salary to new contract with Horizon: Twelve months ended December 31, 1996: 52,000 Nine months ended September 30, 1997: 45,000 (5) Eliminate investment income: Twelve months ended December 31, 1996: 3,000 Nine months ended September 30, 1997: 3,000 (6) Adjust pro forma income taxes (at a rate of 35%) for acquistion adjustments and historical income: Twelve months ended December 31, 1996: 37,000 Nine months ended September 30, 1997: 34,000
F-12 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. REGISTRANT: HORIZON PHARMACIES, INC. Date: February 18, 1998 By: /s/ Ricky D. McCord ------------------------------------ Ricky D. McCord, President INDEX TO EXHIBITS Appears at Exhibit Sequentially Number Description Numbered Page - ------- ----------- ------------- 23 Consent of Howard & Waltrip, P.C., Independent 5 Auditors (filed electronically herewith). EX-23 2 CONSENT OF HOWARD & WALTRIP Exhibit 23 Consent of Independent Auditors We consent to the use of our report on the financial statements for the year ended December 31, 1996 of Mart Super Drug dated January 29, 1998 in the Form 8-K/A of HORIZON Pharmacies, Inc. Howard & Waltrip, P.C. Certified Public Accountants Dallas, Texas February 17, 1998 -----END PRIVACY-ENHANCED MESSAGE-----