-----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, Aj7B/uR38wFsEdSWIv9dLhAjLvEN1IwBvUMmG8uJYxwkbIlE2Su4DdeTr+AWnUoX OoL4UYcp5XngZajBPEyQiw== 0001047469-98-031777.txt : 19980817 0001047469-98-031777.hdr.sgml : 19980817 ACCESSION NUMBER: 0001047469-98-031777 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980530 ITEM INFORMATION: FILED AS OF DATE: 19980814 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: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-22403 FILM NUMBER: 98691455 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): May 30, 1998 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 Graham's Pharmacy and Home Health Center, Inc.: (i) audited Balance Sheet at December 31, 1997 and audited Statement of Income, Statement of Shareholders' Equity and Statement of Cash Flows each for the year ended December 31, 1997, and the report of Howard & Waltrip, P.C., certified public accountants, thereon, together with the notes thereto; and (ii) unaudited Balance Sheet at March 31, 1998, and unaudited Statements of Income, unaudited Statements of Shareholders' Equity, and unaudited Statements of Cash Flows each for the three months ended March 31, 1998 and March 31, 1997. 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 March 31, 1998 and Pro Forma Combined Condensed Statement of Income for the three months ending March 31, 1998 and the year ended December 31, 1997, 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- 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: August 13, 1998 By: /s/ Ricky D. McCord ------------------------------ Ricky D. McCord, President -3- GRAHAM'S PHARMACY AND HOME HEALTH CENTER, INC. FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 1997 WITH REPORT OF INDEPENDENT AUDITORS The Board of Directors and Shareholders August 5, 1998 Graham's Pharmacy and Home Health Center, Inc. REPORT OF INDEPENDENT AUDITORS We have audited the accompanying balance sheet of Graham's Pharmacy and Home Health Center, Inc. as of December 31, 1997, and the related statement of income, shareholders' 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 Graham's Pharmacy and Home Health Center, Inc. at December 31, 1997, 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 GRAHAM'S PHARMACY AND HOME HEALTH CENTER, INC. BALANCE SHEETS
DECEMBER 31, MARCH 31, ASSETS 1997 1998 ------------ ----------- (Unaudited) Current assets Cash $ 4,426 $ 12,061 Accounts receivable-trade 111,280 114,159 Inventories, lower of cost or market 193,541 196,486 Employee advances 595 400 --------- --------- Total current assets 309,842 323,106 Fixed assets Land 7,500 7,500 Buildings, equipment, automobiles 744,324 744,324 Accumulated depreciation (273,016) (294,049) --------- --------- Total net fixed assets 478,808 457,775 Other assets Deposits 207 207 Patent/trademarks 2,375 2,375 Goodwill 24,027 24,027 Accumulated amortization (8,910) (9,075) --------- --------- Total other assets 17,699 17,534 --------- --------- TOTAL ASSETS $ 806,349 $ 798,415 --------- --------- --------- --------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable-trade $ 117,002 $ 110,890 Accrued expenses 7,531 8,856 Current portion of long term debt 6,360 4,749 --------- --------- Total current liabilities 130,893 124,495 Long term liabilities Notes payable 15,274 13,663 Current portion of long term debt (6,360) (4,749) --------- --------- Total long term liabilities 8,914 8,914 --------- --------- Total liabilities 139,807 133,409 Shareholders' equity Capital stock 17,071 17,071 Retained earnings 649,471 647,935 --------- --------- Total shareholders' equity 666,542 665,006 --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 806,349 $ 798,415 --------- --------- --------- ---------
See accompanying notes. GRAHAM'S PHARMACY AND HOME HEALTH CENTER, INC. STATEMENTS OF INCOME
THREE MONTHS ENDED YEAR ENDED MARCH 31, DECEMBER 31, ----------------------- 1997 1997 1998 ------------ -------- -------- (Unaudited) Net sales $2,272,023 $517,746 $532,498 Cost of sales 1,233,775 290,859 304,264 ---------- -------- -------- Gross profit 1,038,248 226,887 228,234 ---------- -------- -------- Operating expenses: Selling, general and administrative 731,557 169,803 170,984 Depreciation and amortization 73,002 18,251 21,198 ---------- -------- -------- Total operating expenses 804,559 188,054 192,182 Income(loss) from operations 233,689 38,833 36,052 Other income (expense): Interest income 567 115 58 Interest expense (1,900) (504) (86) ---------- -------- -------- Total other income (expense) (1,333) (389) (28) ---------- -------- -------- Net income $ 232,356 $ 38,444 $ 36,024 ---------- -------- -------- ---------- -------- --------
See accompanying notes. GRAHAM'S PHARMACY AND HOME HEALTH CENTER, INC. STATEMENTS OF SHAREHOLDERS' EQUITY
THREE MONTHS ENDED YEAR ENDED MARCH 31, DECEMBER 31, ----------------------- 1997 1997 1998 ------------ -------- -------- (Unaudited) Balance, Beginning of period $ 539,761 $539,761 $649,471 Net income 232,356 38,444 36,024 Distributions (122,646) (30,662) (37,560) --------- -------- -------- Balance, End of Period $ 649,471 $547,543 $647,935 --------- -------- -------- --------- -------- --------
See accompanying notes. GRAHAM'S PHARMACY AND HOME HEALTH CENTER, INC. STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED YEAR ENDED MARCH 31, DECEMBER 31, --------------------- 1997 1997 1998 ------------ -------- -------- (Unaudited) Operating activities: Net income $ 232,356 $ 38,444 $ 36,024 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 73,002 18,251 21,198 Change in operating assets and liabilities: Accounts receivable-trade (31,683) (17,622) (2,879) Inventories (112,042) (40,064) (2,945) Employee advances (195) (195) 195 Accounts payable-trade 4,519 1,319 (6,112) Accrued expenses 4,435 1,110 1,325 --------- -------- -------- Net cash provided (used) by operating activities 170,392 1,243 46,806 Investing activities: Purchase of fixed assets (159,085) (37,271) 0 Financing activities: Borrowings on notes payable 14,933 0 0 Principal payments on notes payable (54,942) (12,736) (1,611) Contributions from shareholders 35,817 0 0 Distributions to shareholders (122,646) (30,662) (37,560) --------- -------- -------- Net cash (used) provided by financing activities (126,838) (43,398) (39,171) Net increase (decrease) in cash (115,531) (79,426) 7,635 Cash at beginning of period 119,957 119,957 4,426 --------- -------- -------- Cash at end of period $ 4,426 $ 40,531 $ 12,061 --------- -------- -------- --------- -------- -------- Supplemental disclosure of interest paid $ 1,900 $ 504 $ 86 --------- -------- -------- --------- -------- --------
See accompanying notes. GRAHAM'S PHARMACY AND HOME HEALTH CENTER, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 1. Summary of significant accounting policies Organization GRAHAM'S PHARMACY AND HOME HEALTH CENTER, INC., A New Mexico corporation (the "Company"), owns and operates a retail pharmacy in Las Vegas, New Mexico. 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 on a month to month basis from a related party. Rent expense for fiscal year ended December 31, 1997 was $18,685. GRAHAM'S PHARMACY AND HOME HEALTH CENTER, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 3. Long term liabilities Installment notes totaling approximately $15,274 $375 per month at 8.25% interest, maturing in 1998. Less current portion of long term debt (6,360) ------- Total long term liabilities $ 8,914 ------- -------
4. Subsequent events On May 30, 1998 the Company sold a majority of its assets to HORIZON Pharmacies, Inc. and ceased operations. HORIZON PHARMACIES, INC. PRO FORMA COMBINED CONDENSED BALANCE SHEET MARCH 31, 1998 (IN THOUSANDS) Company Las Vegas ASSETS Historical Store (Note) Pro Forma ---------- ------------ --------- Current assets: Cash $ 2,388 ($450) $1,938 Accounts receivable 5,029 5,029 Inventories 9,828 150 9,978 Other 187 187 ---------- ------------ --------- Total current assets 17,432 (300) 17,132 Property and equipment, net 2,112 341 2,453 Intangibles, net 3,871 559 4,430 ---------- ------------ --------- Total assets $23,415 $600 $24,015 ---------- ------------ --------- ---------- ------------ --------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 4,000 $4,000 Accrued liabilities 675 675 Notes payable 320 320 Current portion of long-term obligations 879 $ 85 964 ---------- ------------ --------- Total currrent liabilities 5,874 85 5,959 Long-term obligations 4,686 415 5,101 Deferred income taxes 157 157 Shareholder's equity: Common stock 45 45 Additional paid-in capital 12,100 100 12,200 Retained earnings 553 553 ---------- ------------ --------- Total shareholders' equity 12,698 100 12,798 ---------- ------------ --------- Total liabilities and shareholders' equity $23,415 $600 $24,015 ---------- ------------ --------- ---------- ------------ ---------
Note: The Las Vegas Store was acquired in May 1998 for a total consideration of $1,050 financed by a note payable of $500, stock of $100 and cash of $450 and is included herein at the values allocated to assets acquired. HORIZON PHARMACIES, INC. PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME THREE MONTHS ENDED MARCH 31, 1998 (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) Historical ------------------------ Las Vegas Pro Forma Company Store Adjustments Pro Forma ------- --------- ----------- --------- Net revenues $12,822 $532 $13,354 Cost and expenses: Cost of sales and services 8,850 304 9,154 Depreciation and amortization 151 21 $(21)(1) 169 18 (1) Selling, general and administrative 3,310 171 (16)(3) 3,465 ------- ----- ----- --------- Total costs and expenses 12,311 496 (19) 12,788 ------- ----- ---- --------- Income from operations 511 36 19 566 Interest expense and other, net 53 0 9 (2) 62 ------- ----- ---- --------- Income before income taxes 458 36 10 504 Provision for income taxes 183 0 19 (4) 202 ------- ----- ---- --------- Net income $275 $36 ($9) $302 ------- ----- ---- --------- ------- ----- ---- --------- Basic earnings per share $0.07 --------- --------- Shares used in computation of basic earnings per share 4,500,958 --------- --------- Diluted earnings per share $0.06 --------- --------- Shares used in computation of diluted earnings per share 4,760,179 --------- ---------
HORIZON PHARMACIES, INC. PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME YEAR ENDED DECEMBER 31, 1997 (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) Historical ----------------------- Las Vegas Pro Forma Company Store Adjustments Pro Forma ------- --------- ----------- --------- Net revenues $28,430 $2,272 $30,702 Cost and expenses: Cost of sales and services 19,132 1,234 20,366 Depreciation and amortization 330 73 $ (73)(1) 404 74 (1) Selling, general and administrative 7,943 732 (75)(3) 8,600 ------- ------ ----- ---------- Total costs and expenses 27,405 2,039 (74) 29,370 ------- ------ ----- ---------- Income from operations 1,025 233 74 1,332 Interest expense and other, net 218 1 33 (2) 252 ------- ------ ----- ---------- Income before income taxes 807 232 41 1,080 Provision for income taxes 480* 100 (4) 580 ------- ------ ----- ---------- Net income $ 327 $ 232 $ (59) $ 500 ------- ------ ----- ---------- ------- ------ ----- ---------- Basic earnings per share $ 0.18 ---------- ---------- Shares used in computation of basic earnings per share 2,777,618 ---------- ---------- Diluted earnings per share $0.17 ---------- ---------- Shares used in computation of diluted earnings per share 2,873,186 ---------- ----------
* Includes $170 deferred income taxes resulting from change in tax status. ADJUSTMENTS TO PRO FORMA FINANCIAL STATEMENTS (Dollars in Thousands) (1) Adjust depreciation and amortization of acquired equipment and intangibles to reflect new basis in the acquired store: Eliminate historical depreciation and amortization: Twelve months ended December 31, 1997: $ 73 Three months ended March 31, 1998: 21 Provide depreciation and amortization on acquired bases in equipment and intangibles: Equipment - 7 to 10 year life - purchase price allocated 341 Intangibles - 5 to 40 year life - purchase price allocated 559 Twelve months ended December 31, 1997: Depreciation of equipment 49 Amortization of intangibles 25 ---- Total 74 Three months ended March 31, 1998: Depreciation of equipment 12 Amortization of intangibles 6 ---- Total 18 (2) Adjust interest expense: Provide for interest expense on debt issued in acquisition: Debt 500 Interest rate 8.00% Twelve months ended December 31, 1997: 33 Three months ended March 31, 1998: 9 (3) Decrease previous Officer Salary to new contract with Horizon: Twelve months ended December 31, 1997: 75 Three months ended March 31, 1998: 16 (4) Adjust pro forma taxes (at a rate of 38% for 1997 and 40% for 1998) for acquisition adjustments and historical income: Twelve months ended December 31, 1997: 100 Three months ended March 31, 1998: 19
EX-23 2 EXHIBIT 23 Exhibit 23 Consent of Independent Auditors We consent to the use of our report on the financial statements for the year ended December 31, 1997 of Graham's Pharmacy and Home Health Center, Inc., in the Form 8-K/A dated May 30, 1998 of HORIZON Pharmacies, Inc. Howard & Waltrip, P.C. Certified Public Accountants Dallas, Texas August 5, 1998 -----END PRIVACY-ENHANCED MESSAGE-----