EX-99 5 exhibit99-3final.htm EXHIBIT 99.3

 

Exhibit 99.3

 

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

 

The unaudited pro forma consolidated statements of income for the six months ended June 30, 2008 and the year ended December 31, 2007 give effect to Almost Family, Inc.’s (the Company) August 1, 2008 acquisition of Patient Care, Inc. (Patient Care) as if the acquisition had been completed on January 1, 2007.

 

The unaudited pro forma consolidated balance sheet as of June 30, 2008, gives effect to the acquisition as if the transaction had occurred on June 30, 2008.

 

The unaudited pro forma consolidated financial information should be read in conjunction with the Company’s historical consolidated financial statements and accompanying notes included in the Company’s periodic reports previously filed with the Securities and Exchange Commission, along with the historical financial statements included elsewhere in this Form 8-K/A. The unaudited pro forma consolidated financial information may not necessarily reflect the financial position or results of operations which would have been obtained if these transactions had been consummated on the dates indicated in the unaudited pro forma consolidated financial information.

 

The unaudited pro forma consolidated financial data are based on preliminary estimates and assumptions set forth in the notes to such information that we believe are reasonable. Pro forma adjustments are necessary to reflect the estimated purchase price and changes in our capital structure and to adjust amounts related to Patient Care assets and liabilities to a preliminary estimate of their fair values. Pro forma adjustments are also necessary to reflect interest expense and the income tax effects related to the pro forma adjustments.

 

The pro forma adjustments and allocation of purchase price are preliminary and are based on management’s estimates of the fair value of the assets acquired and liabilities assumed. The final purchase price allocation will be completed after asset and liability valuations are finalized. This final valuation will be based on the actual assets and liabilities of Patient Care that exist as of the date of the completion of the transaction. Any final adjustments may change the allocation of purchase price which could affect the fair value assigned to the assets and liabilities and could result in a change to the unaudited pro forma consolidated financial data. In addition, the impact of integration activities could cause material differences in the information presented.

 

The unaudited pro forma financial information is presented for informational purposes only and is based on certain assumptions that we believe are reasonable and does not purport to represent our financial condition or our results of operations had the business combination occurred on or as of the dates noted above nor is the financial information necessarily indicative of future consolidated financial position or results of operations.

 

 

 


ALMOST FAMILY, INC.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

As of June 30, 2008

 

 

 

Almost Family

 

PCI Holding Corp.

 

Pro Forma

Adjustments

 

Notes

 

Pro Forma

As Adjusted

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

16,480,426 

$

5,001,930 

$

(4,987,206)

 

(a)

$

16,495,150

Accounts receivable - net

 

25,011,813 

 

6,897,161 

 

(242,009)

 

(a)

 

31,666,965

Prepaid expenses and

other current

 

1,824,294 

 

1,133,078 

 

(817,822)

 

(a)

 

2,139,550

Deferred tax assets

 

2,811,047 

 

37,260 

 

3,715,032

 

(a)(f)

 

6,563,339

TOTAL CURRENT

  ASSETS

 

46,127,580 

 

13,069,429 

 

(2,332,005)

 

 

 

56,865,004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT – net

 

1,877,916 

 

2,228,434 

 

 

 

 

4,106,350

GOODWILL AND OTHER INTANGIBLE ASSETS

 

58,795,818 

 

18,101,077 

 

26,172,193 

 

(b)

 

103,069,088

OTHER ASSETS

 

287,046 

 

1,472,144 

 

(351,252)

 

(a)

 

1,407,938

TOTAL ASSETS

$

107,088,360 

$

34,871,084 

$

23,488,936 

 

 

$

165,448,380

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

 

 

Accounts payable

$

3,281,899 

$

1,752,298 

$

(2,211)

 

(a)

$

5,031,986

Accrued liabilities

 

9,810,654 

 

10,888,591 

 

935,066 

 

(a)(c)

 

21,634,311

Current portion – debt and

  leases

 

4,596,945 

 

701,072 

 

 

 

 

5,298,017

TOTAL CURRENT LIABILITIES

 

17,689,498 

 

13,341,961 

 

932,855 

 

 

 

31,964,314

 

 

 

 

 

 

 

 

 

 

 

LONG-TERM LIABILITIES:

 

 

 

 

 

 

 

 

 

 

Revolving credit facility

 

 

2,564,561 

 

39,806,273 

 

(a)(c)

 

42,370,834

Capital lease obligations

 

 

537,833 

 

 

 

 

537,833

Notes payable

 

3,000,000 

 

 

 

 

 

3,000,000

Long term deferred tax

  liabilities

 

1,481,750 

 

1,099,210 

 

(857,346)

 

(f)

 

1,723,614

Other liabilities

 

417,006 

 

 

934,673 

 

(c)

 

1,351,679

TOTAL LONG-TERM

  LIABILITIES

 

4,898,756 

 

4,201,604 

 

39,883,600 

 

 

 

48,983,960

TOTAL LIABILITIES

 

22,588,254 

 

17,543,565 

 

40,816,455 

 

 

 

80,948,274

 

 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series A redeemable preferred stock, authorized

 

 

74,181,000 

 

(74,181,000)

 

(d)

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

 

 

Preferred stock, par value

$0.05;  authorized 2,000,000

shares; none  issued or

outstanding

 

 

-

 

-

 

 

 

-

     Common stock, par value

     $0.10; authorized 10,000,000

 

 

 

 

 

 

 

 

 

 

 shares; 7,886,188 issued

 and outstanding

 

813,179 

 

 

 

 

 

813,179

     Common stock, authorized   

     8,000,000 shares $0.01

 

 

 

57,000 

 

(57,000)

 

(d)

 

-

Additional paid-in capital

 

64,551,981 

 

 

 

 

 

64,551,981

Retained earnings

 

19,134,946 

 

(56,910,481)

 

56,910,481 

 

(d)

 

19,134,946

TOTAL STOCKHOLDERS’

EQUITY

 

84,500,106 

 

(56,853,481)

 

56,853,481 

 

 

 

84,500,106

 

 

$

107,088,360 

 

$

34,871,084 

$

23,488,936 

 

 

 

$

165,448,380

See notes to unaudited pro forma consolidated financial information.

 

 

 


ALMOST FAMILY, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

For the Six Months Ended June 30, 2008

 

 

 

Almost Family

 

PCI Holding Corp.

 

Pro Forma

Adjustments

Notes

 

Pro Forma

As Adjusted

 

 

 

 

 

 

 

 

 

 

Net service revenues

$

87,727,325 

$

24,118,849 

$

 

$

111,846,174 

Cost of service revenue

 

41,402,549 

 

11,448,393 

 

 

 

52,850,942 

Gross margin

 

46,324,776 

 

12,670,456 

 

 

 

58,995,232 

General and administrative expenses

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

23,540,855 

 

7,772,287 

 

 

 

31,313,142 

Other

 

11,664,808 

 

4,200,019 

 

 

 

15,864,827 

Total general and administrative

 

35,205,663 

 

11,972,306 

 

 

 

47,177,969 

 

Operating income (loss)

 

11,119,113 

 

698,150 

 

 

 

11,817,263 

Other income (expense):

 

 

 

 

 

 

 

 

Interest income (expense)

 

(378,757)

 

(166,064)

 

 

(859,310)

(e)

 

(1,404,131)

 

Income (loss) from continuing operations before income taxes

 

10,740,356 

 

532,086 

 

(859,310)

 

 

10,413,132 

(Provision) benefit for income taxes

 

(4,266,792)

 

71,000 

 

58,995 

(f)

 

(4,136,797)

Income (loss) from continuing

operations

 

$

6,473,564 

 

$

603,086 

 

 

$

 

(800,315)

 

 

$

6,276,335 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share amounts-Basic:

 

 

 

 

 

 

 

 

 

Average shares outstanding

 

6,592,203 

 

 

 

 

 

 

6,592,203 

Income from continuing operations

$

0.98 

 

 

 

 

 

$

0.95 

 

 

 

 

 

 

 

 

 

 

Per share amounts-Diluted:

 

 

 

 

 

 

 

 

 

Average shares outstanding

 

6,753,403 

 

 

 

 

 

 

6,753,403 

Income from continuing operations

$

0.96 

 

 

 

 

 

$

0.93 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to unaudited pro forma consolidated financial information.

 

 

 


ALMOST FAMILY, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

For the Year Ended December 31, 2007

 

 

 

Almost Family

 

PCI Holding Corp.

 

Pro Forma

Adjustments

Notes

 

Pro Forma

As Adjusted

 

 

 

 

 

 

 

 

 

 

Net service revenues

$

132,130,056 

$

46,474,000 

$

 

$

178,604,056 

Cost of service revenue

 

63,880,104 

 

23,278,000 

 

 

 

87,158,104 

Gross margin

 

68,249,952 

 

23,196,000 

 

 

 

91,445,952 

General and administrative expenses

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

35,945,823 

 

13,643,000 

 

 

 

49,588,823 

Other

 

18,380,596 

 

12,246,000 

 

 

 

30,626,596 

Total general and administrative

 

54,326,419 

 

25,889,000 

 

 

 

80,215,419 

 

Operating income (loss)

 

13,923,533 

 

(2,693,000)

 

 

 

 

11,230,533 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income(expense)

 

(836,911)

 

(2,204,000)

 

(893,308)

(e)

 

(3,934,219)

 

Income (loss) from continuing operations before income taxes

 

13,086,622 

 

(4,897,000)

 

 

(893,308)

 

 

7,296,314 

(Provision) benefit for income taxes

 

(5,272,149)

 

2,463,000 

 

(130,284)

(f)

 

(2,939,433)

Income (loss) from continuing

operations

 

$

7,814,473 

 

$

(2,434,000)

 

 

$

 

(1,023,592)

 

 

$

4,356,881 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share amounts-Basic:

 

 

 

 

 

 

 

 

 

Average shares outstanding

 

5,435,615 

 

 

 

 

 

 

5,435,615 

Income from continuing operations

 

$

1.44 

 

 

 

 

 

 

$

0.80 

 

 

 

 

 

 

 

 

 

 

Per share amounts-Diluted:

 

 

 

 

 

 

 

 

 

Average shares outstanding

 

5,599,476 

 

 

 

 

 

 

5,599,476 

Income from continuing operations

 

$

1.40 

 

 

 

 

 

 

$

0.78 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to unaudited pro forma consolidated financial information.

 

 

 


ALMOST FAMILY, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED

FINANCIAL INFORMATION

 

NOTE 1 – BASIS OF PRESENTATION

 

The accompanying unaudited pro forma consolidated financial information is presented on a basis consistent with the Company’s historical consolidated financial statements. Almost Family acquired the stock of Patient Care, Inc. which represents substantially all of the continuing operations of PCI Holding Corp. Assets and liabilities of PCI Holding Corp. not acquired by Almost Family have been eliminated in pro-forma adjustments as further described below.

 

NOTE 2 – PURCHASE PRICE ALLOCATION

 

Purchase Price Summary

For purposes of the pro forma financial information, the following table presents the components of the purchase price consideration.

 

Cash paid

$

42,370,834

Acquisition costs

 

1,407,974

Liabilities assumed

 

14,339,348

Total purchase price

$

58,118,156

 

 

Estimated acquisition costs included above consist primarily of broker, legal, accounting fees and other directly related costs. None of these costs have been paid and are included on the balance sheet in accounts payable and other current liabilities.

 

Purchase Price Allocation

The following represents the preliminary allocation of the purchase price to the acquired assets of Patient Care and is for illustrative purposes only. The allocation is preliminary and is based on Patient Care’s assets and liabilities as of June 30, 2008.

 

Accounts receivable

$

6,655,152

Deferred taxes, net

 

3,510,428

Property and equipment, net

 

2,228,434

Other tangible assets

 

1,450,872

Specifically identifiable intangible assets

 

 

4,554,000

Goodwill

 

39,719,270

Total purchase price

$

58,118,156

 

 

Goodwill represents the excess of the purchase price over the fair value of tangible and intangible assets. Specifically identifiable intangible assets include trade name, licenses, certificates of need (the amortizable portion of which is expected to be amortized over a 15 year useful life) and a non-compete agreement (expected to be amortized over a 2.5 year useful life).

 

 

 


NOTE 3 – PRO FORMA ADJUSTMENTS

 

The following pro forma adjustments are reflected in the accompanying unaudited pro forma consolidated financial information:

 

 

(a)

To remove assets and liabilities of PCI Holding Corp. not acquired or assumed by the Company.

 

 

(b)

To record anticipated intangible assets based on the Company’s preliminary purchase price allocation. Of the total estimated purchase, $4.6 million has been allocated to trade name, licenses, provider numbers, Certificates of Need and a non-compete agreement. The purchase price allocated to intangible assets in the unaudited pro forma consolidated balance sheet is an estimate because the Company is in the process of determining the fair value of such assets. Based on its preliminary allocation of purchase price, the Company does not expect amortization expense related to intangible assets to differ materially from that reported by the acquiree.

 

 

(c)

To record borrowings made on the Company’s revolving credit facility to fund the cash portion of the purchase price, and other liabilities assumed by the Company in the acquisition.

 

 

(d)

To eliminate the stockholders’ equity section of the sellers’ balance sheet.

 

 

(e)

To record the pro forma interest expense on funds borrowed to finance the acquisition, net of interest expense reported by the acquiree.

 

 

(f)

To record the pro forma (provision) benefit for income taxes based on “Pro Forma as Adjusted” pretax income (loss) based upon each period’s consolidated combined state and Federal effective tax rate.

 

NOTE 4 – ADDITIONAL INFORMATION

 

The pro forma adjustments reflected in the accompanying unaudited pro forma financial information and outlined in Note 3 reflect only those required by and permissible under the rules and regulations of the U.S. Securities and Exchange Commission.

 

For the year ended December 31, 2007, Patient Care incurred $10,344,000 of unallocated corporate overhead costs, exclusive of interest expense. For the six months ended June 30, 2008, Patient Care incurred $4,401,000 of unallocated corporate overhead costs.