-----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, KAaj3asclSXPRwbLEC8Fewos22Jk+JqtmqajksGrYoV+ywZcQj41NIJ9K/UhL0ga pvzMwcRyy5kcIIOz+KpEFw== 0001047469-98-038443.txt : 19981029 0001047469-98-038443.hdr.sgml : 19981029 ACCESSION NUMBER: 0001047469-98-038443 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980815 ITEM INFORMATION: FILED AS OF DATE: 19981028 SROS: NONE 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: 98732047 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 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): August 15, 1998 HORIZON PHARMACIES, INC. (Exact name of registrant as specified in its charter) DELAWARE 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 R-D Pharmacy & Books, a sole proprietorship: (i) audited Balance Sheet at December 31, 1997 and audited Statement of Income, Statement of Owners' Equity and Statement of Cash Flows 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 June 30, 1998, and unaudited Statements of Income, unaudited Statements of Shareholders' Equity, and unaudited Statements of Cash Flows each for the six months ended June 30, 1998 and June 30, 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 June 30, 1998 and Pro Forma Combined Condensed Statement of Income for the six months ended June 30, 1998 and the year ended December 31, 1997, and the Adjustments to Pro Forma Financial Statements applicable 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: October 27, 1998 By: /s/ Ricky D. McCord ------------------------------ Ricky D. McCord, President -3- R-D PHARMACY & BOOKS YEAR ENDED DECEMBER 31, 1997 WITH REPORT OF INDEPENDENT AUDITORS [LETTERHEAD] The Owners October 23, 1998 R-D Pharmacy & Books REPORT OF INDEPENDENT AUDITORS We have audited the accompanying balance sheet of R-D Pharmacy & Books as of December 31, 1997, and the related statement of income, owners' 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 R-D Pharmacy & Books 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 R-D PHARMACY & BOOKS BALANCE SHEETS
DECEMBER 31, JUNE 30, ASSETS 1997 1998 ----------------- ----------- (Unaudited) Current assets: Cash $ 40,934 $ 43,193 Accounts receivable-trade 53,935 63,394 Inventories, lower of cost or market 178,401 181,034 ---------- --------- Total current assets 273,270 287,621 Fixed assets: Improvements 8,281 8,281 Furniture and Equipment 126,548 126,548 Automobile 27,300 27,300 Accumulated depreciation (134,819) (138,874) ---------- --------- Total net fixed assets 27,310 23,255 Other assets: Goodwill 12,000 12,000 Accumulated amortization (12,000) (12,000) ---------- --------- Total other assets 0 0 TOTAL ASSETS $ 300,580 $ 310,876 ---------- --------- ---------- --------- LIABILITIES AND OWNERS' EQUITY Current Liabilities: Accounts payable-trade $ 46,853 $ 45,330 Payroll taxes payable 0 63 ---------- --------- Total current liabilities 46,853 45,393 Owners' equity 253,727 265,483 ---------- --------- TOTAL LIABILITIES AND OWNERS' EQUITY $ 300,580 $ 310,876 ---------- --------- ---------- ---------
See accompanying notes. R-D PHARMACY & BOOKS STATEMENTS OF INCOME
SIX MONTHS ENDED YEAR ENDED JUNE 30, DECEMBER 31, ----------------------- 1997 1997 1998 ----------------- -------- -------- (Unaudited) Net sales $1,356,143 $646,153 $702,339 Cost of sales 911,196 456,196 469,508 ---------- -------- -------- Gross profit 444,947 189,957 232,831 Operating expenses: Selling, general and administrative 265,769 106,651 129,844 Depreciation 13,569 6,785 4,055 ---------- -------- -------- Total operating expenses 279,338 113,436 133,899 ---------- -------- -------- Income from operations 165,609 76,521 98,932 Other income (expense): Other income 2,213 1,230 1,137 ---------- -------- -------- Net income $ 167,822 $ 77,751 $100,069 ---------- -------- -------- ---------- -------- --------
See accompanying notes. R-D PHARMACY & BOOKS STATEMENTS OF OWNERS' EQUITY
SIX MONTHS ENDED YEAR ENDED JUNE 30, DECEMBER 31, ----------------------- 1997 1997 1998 ----------------- -------- -------- (Unaudited) Balance, Beginning of period $ 233,249 $ 233,249 $ 253,727 Owner draws (147,344) (93,694) (88,313) Net income 167,822 77,751 100,069 ---------- --------- --------- Balance, End of Period $ 253,727 $ 217,306 $ 265,483 ---------- --------- --------- ---------- --------- ---------
See accompanying notes. R-D PHARMACY & BOOKS STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED YEAR ENDED JUNE 30, DECEMBER 31, ------------------- 1997 1997 1998 ----------------- ---- ---- (Unaudited) Operating activities: Net income $ 167,822 $ 77,751 $100,069 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 13,569 6,785 4,055 Change in operating assets and liabilities: Accounts receivable-trade 7,256 22,881 (9,459) Inventories (48,587) (14,268) (2,633) Accounts payable-trade (1,911) (9,036) (1,523) Payroll taxes payable (912) 0 63 ---------- -------- -------- Net cash provided by operating activities 137,237 84,113 90,572 Investing activities: Purchase of fixed assets (2,132) (2,132) 0 Financing activities: Owner Draws (147,344) (93,694) (88,313) ---------- -------- -------- Net increase (decrease) in cash (12,239) (11,713) 2,259 Cash at beginning of period 53,173 53,173 40,934 ---------- -------- -------- Cash at end of period $ 40,934 $ 41,460 $ 43,193 ---------- -------- -------- ---------- -------- -------- Supplemental disclosure of interest paid none none none ---------- -------- -------- ---------- -------- --------
See accompanying notes. R-D PHARMACY & BOOKS NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 1. Summary of significant accounting policies Organization R-D PHARMACY & BOOKS, a sole proprietorship (the "Company"), owns and operates a retail pharmacy in Douglas, Wyoming. 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 equipment 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 $7,800. 3. Income Taxes The Company is a sole proprietorship for income tax purposes. The net taxable income of the Company is included in the personal income taxes of the owner. Therefore, no provisions or liability for federal income taxes is reflected in these statements. 5. Subsequent events On August 15, 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 JUNE 30, 1998 (IN THOUSANDS)
Company Douglas ASSETS Historical Store (Note) Pro Forma ---------- ------------ --------- Current assets: Cash $ 6,517 $(200) $ 6,317 Accounts receivable 5,805 5,805 Inventories 11,504 188 11,692 Other 302 302 ------- ------ -------- Total current assets 24,128 (12) 24,116 Property and equipment, net 2,731 20 2,751 Intangibles, net 5,036 353 5,389 ------- ------ -------- Total assets $31,895 $ 361 $32,256 ------- ------ -------- ------- ------ -------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 4,006 $ 4,006 Accrued liabilities 738 738 Notes payable 233 233 Current portion of long-term obligations 1,054 $ 29 1,083 ------- ------ -------- Total currrent liabilities 6,031 29 6,060 Long-term obligations 5,345 232 5,577 Deferred income taxes 157 157 Shareholder's equity: Common stock 54 54 Additional paid-in capital 19,608 100 19,708 Retained earnings 770 770 Treasury stock (70) (70) ------- ------ -------- Total shareholders' equity 20,362 100 20,462 ------- ------ -------- Total liabilities and shareholders' equity $31,895 $ 361 $32,256 ------- ------ -------- ------- ------ --------
Note: The Douglas Store was acquired in August 1998 for a total consideration of $561 financed by a note payable of $261, stock of $100 and cash of $200 and is included herein at the values allocated to assets acquired. HORIZON PHARMACIES, INC. PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME SIX MONTHS ENDED JUNE 30, 1998 (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
Historical ----------------------- Douglas Pro Forma Company Store Adjustments Pro Forma ------- ------- ----------- --------- Net revenues $28,689 $702 $29,391 Cost and expenses: Cost of sales and services 19,648 469 20,117 Depreciation and amortization 330 4 $ (4) (1) 339 9 (1) Selling, general and administrative 7,744 130 36 (3) 7,912 2 (4) ------- ---- ----- --------- Total costs and expenses 27,722 603 43 28,368 ------- ---- ----- --------- Income from operations 967 99 (43) 1,023 Interest expense and other, net 153 (1) 14 (2) 166 ------- ---- ----- --------- Income before income taxes 814 100 (57) 857 Provision for income taxes 322 21 (5) 343 ------- ---- ----- --------- Net income $ 492 $100 $(78) $ 514 ------- ---- ----- --------- ------- ---- ----- --------- Basic earnings per share $ 0.11 --------- --------- Shares used in computation of basic earnings per share 4,595,719 --------- --------- Diluted earnings per share $ 0.11 --------- --------- Shares used in computation of diluted earnings per share 4,868,656 --------- ---------
HORIZON PHARMACIES, INC. PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME YEAR ENDED DECEMBER 31,1997 (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
Historical ---------------------- Douglas Pro Forma Company Store Adjustments Pro Forma ------- ------- ----------- --------- Net revenues $28,430 $1,356 $ 29,786 Cost and expenses: Cost of sales and services 19,132 910 20,042 Depreciation and amortization 330 14 $ (14) (1) 346 16 (1) Selling, general and administrative 7,943 266 72 (3) 8,284 3 (4) ------- ------ ------ ---------- Total costs and expenses 27,405 1,190 77 28,672 ------- ------ ------ ---------- Income from operations 1,025 166 (77) 1,114 Interest expense and other, net 218 (2) 20 (2) 236 ------- ------ ------ ---------- Income before income taxes 807 168 (97) 878 Provision for income taxes 480 * 24 (4) 504 ------- ------ ------ ---------- Net income $ 327 $ 168 $(121) $ 374 ------- ------ ------ ---------- ------- ------ ------ ---------- Basic earnings per share $ 0.13 ---------- ---------- Shares used in computation of basic earnings per share 2,778,090 ---------- ---------- Diluted earnings per share $ 0.13 ---------- ---------- Shares used in computation of diluted earnings per share 2,873,658 ---------- ----------
* Includes $170 deferred income taxes resulting from change in tax status. 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 and amortization: Twelve months ended December 31, 1997: $ 14 Six months ended June 30, 1998: 4 Provide depreciation and amortization on acquired bases in equipment and intangibles: Equipment - 7 year life - purchase price allocated 20 Intangibles - 6 to 40 year life - purchase price allocated 353 Twelve months ended December 31, 1997: Depreciation of equipment 3 Amortization of intangibles 13 --- Total 16 Six months ended June 30, 1998: Depreciation of equipment 2 Amortization of intangibles 7 --- Total 9 (2) Adjust interest expense: Provide for interest expense on debt issued in acquisition: Debt 261 Interest rate 8.00% Twelve months ended December 31, 1997: 20 Six months ended June 30, 1998: 14 (3) Increase previous Officer Salary/Compensation to new contract with Horizon: Twelve months ended December 31, 1997: 72 Six months ended June 30, 1998: 36 (4) Increase rent expense to new contract with Horizon: Twelve months ended December 31, 1997: 3 Six months ended June 30, 1998: 2 (5) 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: 24 Six months ended June 30, 1998: 21
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 R-D Pharmacy & Books, a sole proprietorship, in the Form 8-K/A dated August 15, 1998 of HORIZON Pharmacies, Inc. /s/ Howard & Waltrip, P.C. - --------------------------------------- Howard & Waltrip, P.C. Certified Public Accountants Dallas, Texas October 27, 1998 -----END PRIVACY-ENHANCED MESSAGE-----