Exhibit 99.2
Nobilis Health Corp. |
Unaudited Pro Forma Interim Consolidated Balance Sheet |
Three Months Ended March 31, 2015 |
(In thousands) |
Nobilis Health Corp. | Victory Medical Center Houston, LP | Pro Forma Adjustments | Pro Forma Consolidated | ||||||||||||
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ASSETS | |||||||||||||||
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CURRENT ASSETS: | |||||||||||||||
Cash | $ | 11,631 | $ | 84 | $ | (20 | ) | (a) | $ | 10,259 | |||||
| (1,436 | ) | (a),(b) | ||||||||||||
Trade accounts receivable, net | 39,700 | 4,904 | (2,404 | ) | (a) | 42,200 | |||||||||
Other receivables | - | 131 | 6,194 | (a) | 418 | ||||||||||
| (5,907 | ) | (c) | ||||||||||||
Inventory | 1,444 | 847 | (185 | ) | (a) | 2,106 | |||||||||
Prepaid expenses and other current assets | 3,167 | 37 | 7 | (a) | 3,211 | ||||||||||
Total current assets | 55,942 | 6,003 | (3,751 | ) | 58,194 | ||||||||||
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PROPERTY AND EQUIPMENT — Net | 6,404 | 4,340 | (87 | ) | (a) | 11,264 | |||||||||
| 607 | (d) | |||||||||||||
INTANGIBLE ASSETS | 19,222 | - | 1,233 | (a) | 20,455 | ||||||||||
GOODWILL | 21,769 | - | 9,230 | (a) | 30,999 | ||||||||||
NOTE RECEIVABLE | 686 | - | - | 686 | |||||||||||
INVESTMENT IN ASSOCIATE | 2,365 | - | - | 2,365 | |||||||||||
OTHER LONG -TERM ASSETS | 125 | 2 | - | 127 | |||||||||||
TOTAL ASSETS | $ | 106,513 | $ | 10,345 | $ | 7,232 | $ | 124,090 | |||||||
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LIABILITIES AND EQUITY | |||||||||||||||
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CURRENT LIABILITIES: | |||||||||||||||
Trade accounts payable | $ | 5,961 | $ | 6,091 | $ | (42 | ) | (a) | $ | 12,010 | |||||
Accrued liabilities | 8,240 | 1,377 | 1,821 | (a) | 11,438 | ||||||||||
Current portion of long-term debt | 655 | - | - | 655 | |||||||||||
Short-term portion of capital leases | 245 | - | - | 245 | |||||||||||
Other current liabilities | 60 | - | - | (c) | 60 | ||||||||||
Total current liabilities | 15,161 | 7,468 | 1,779 | 24,408 | |||||||||||
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LONG-TERM PORTION OF CAPITAL LEASES | 526 | 2,289 | (11 | ) | (a) | 2,804 | |||||||||
LONG-TERM DEBT, NET OF CURRENT PORTION | 18,715 | 6,051 | 1 | (a) | 24,767 | ||||||||||
OTHER LONG-TERM LIABILITIES | 310 | - | - | 310 | |||||||||||
Total liabilities | 34,712 | 15,808 | 1,769 | 52,289 | |||||||||||
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SHAREHOLDERS’ EQUITY: | |||||||||||||||
Common stock | - | - | - | - | |||||||||||
Additional paid in capital | 183,780 | (15,992 | ) | 15,992 | (e) | 183,780 | |||||||||
Accumulated deficit | (133,724 | ) | 10,529 | (10,529 | ) | (e) | (133,724 | ) | |||||||
Accumulated other comprehensive income | (98 | ) | - | - | (98 | ) | |||||||||
Total shareholders’ equity attributable to Nobilis Health Corp. | 49,958 | (5,463 | ) | 5,463 | 49,958 | ||||||||||
NON-CONTROLLING INTERESTS | 21,843 | - | - | (f) | 21,843 | ||||||||||
Total shareholders' equity | 71,801 | (5,463 | ) | 5,463 | 71,801 | ||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 106,513 | $ | 10,345 | $ | 7,232 | $ | 124,090 |
Nobilis Health Corp. |
Unaudited Pro Forma Interim Consolidated Statement of Operations |
Year Ended December 31, 2014 |
(In thousands) |
Nobilis Health Corp. | Victory Medical Center Houston, LP | Pro Forma Adjustments | Pro Forma Consolidated | ||||||||||||
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REVENUE | |||||||||||||||
Net patient service revenue | $ | 80,917 | $ | 22,303 | $ | - | $ | 103,220 | |||||||
Contracted marketing revenue | 2,171 | - | - | 2,171 | |||||||||||
Factoring revenue | 941 | - | - | 941 | |||||||||||
Total revenue | 84,029 | 22,303 | - | 106,332 | |||||||||||
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COST OF REVENUE | 201 | - | - | 201 | |||||||||||
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GROSS PROFIT | 83,828 | 22,303 | - | 106,131 | |||||||||||
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GENERAL AND ADMINISTRATIVE EXPENSES | 62,995 | 27,144 | (4,108 | ) | (g) | 86,118 | |||||||||
| 87 | (h) | |||||||||||||
INCOME (LOSS) FROM OPERATIONS | 20,833 | (4,841 | ) | 4,021 | 20,013 | ||||||||||
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OTHER EXPENSE (INCOME): | |||||||||||||||
Interest expense | 288 | 516 | - | 804 | |||||||||||
Impairment of related party receivable | - | 5,907 | (5,907 | ) | (c) | - | |||||||||
Other income, net | (183 | ) | (362 | ) | - | (545 | ) | ||||||||
Total other expense | 105 | 6,061 | (5,907 | ) | 259 | ||||||||||
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NET INCOME (LOSS) BEFORE INCOME TAXES | |||||||||||||||
AND NONCONTROLLING INTERESTS | 20,728 | (10,902 | ) | 9,928 | 19,754 | ||||||||||
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INCOME TAX | 480 | - | - | 480 | |||||||||||
NET INCOME BEFORE NONCONTROLLING INTERESTS | 20,248 | (10,902 | ) | 9,928 | 19,274 | ||||||||||
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NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 13,062 | - | (1,538) | (i) | 11,524 | ||||||||||
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NET INCOME (LOSS) ATTRIBUTABLE TO NOBILIS HEALTH | $ | 7,186 | $ | (10,902 | ) | $ | 11,466 | $ | 7,750 | ||||||
NET INCOME PER BASIC COMMON SHARE | $ | 0.15 | $ | 0.17 | |||||||||||
NET INCOME PER FULLY DILUTED COMMON SHARE | $ | 0.15 | $ | 0.16 | |||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING (BASIC) | 46,517,815 | 46,517,815 | |||||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING (FULLY DILUTED) | 48,781,348 | 48,781,348 |
Nobilis Health Corp. |
Unaudited Pro Forma Interim Consolidated Statement of Operations |
Three Months Ended March 31, 2015 |
(In thousands) |
Nobilis Health Corp. | Victory Medical Center Houston, LP | Pro Forma Adjustments | Pro Forma Consolidated | ||||||||||||
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REVENUE | |||||||||||||||
Net patient service revenue | $ | 35,058 | $ | 596 | $ | (23 | ) | (j) | $ | 35,631 | |||||
Contracted marketing revenue | 810 | - | - | 810 | |||||||||||
Factoring revenue | 1,248 | - | - | 1,248 | |||||||||||
Total revenue | 37,116 | 596 | (23 | ) | 37,689 | ||||||||||
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COST OF REVENUE | 61 | - | - | 61 | |||||||||||
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GROSS PROFIT | 37,055 | 596 | (23 | ) | 37,628 | ||||||||||
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GENERAL AND ADMINISTRATIVE EXPENSES | 33,271 | 1,469 | (251 | ) | (g) | 34,511 | |||||||||
| 22 | (h) | |||||||||||||
INCOME (LOSS) FROM OPERATIONS | 3,784 | (873 | ) | 206 | 3,117 | ||||||||||
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OTHER EXPENSE (INCOME): | |||||||||||||||
Interest expense | 490 | - | - | 490 | |||||||||||
Other (income) expense, net | (135 | ) | 168 | - | 33 | ||||||||||
Total other expense | 355 | 168 | - | 523 | |||||||||||
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NET INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS | 3,429 | (1,041 | ) | 206 | 2,594 | ||||||||||
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INCOME TAX | 152 | - | - | 152 | |||||||||||
NET INCOME (LOSS) BEFORE NONCONTROLLING INTERESTS | 3,277 | (1,041 | ) | 206 | 2,442 | ||||||||||
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NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 4,490 | - | (495 | ) | (i) | 3,995 | |||||||||
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NET LOSS ATTRIBUTABLE TO NOBILIS HEALTH | $ | (1,213 | ) | $ | (1,041 | ) | $ | 701 | $ | (1,553 | ) | ||||
NET LOSS PER BASIC COMMON SHARE | $ | (0.02 | ) | $ | (0.03 | ) | |||||||||
NET LOSS PER FULLY DILUTED COMMON SHARE | $ | (0.02 | ) | $ | (0.03 | ) | |||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING (BASIC) | 60,191,831 | 60,191,831 | |||||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING (FULLY DILUTED) | 60,191,831 | 60,191,831 |
Notes to the Unaudited Pro Forma Consolidated Financial Statements
The unaudited pro forma consolidated balance sheet and statement of operations give effect to the following transactions, assumptions and adjustments as if they had occurred on January 1, 2014.
The estimated fair values of Victory’s net assets and liabilities, which have been determined from information that is available at this time and incorporates estimates, will be finalized once the final fair values of the assets and liabilities have been determined at the time of closing.
The preliminary estimated fair values of assets acquired and liabilities assumed relating to the acquisition of Victory is as follows (in thousands):
April 24, 2015 | |||
Net assets acquired: | |||
Cash | $ | 64 | |
Trade accounts receivable | 2,500 | ||
Due from Others | 6,325 | ||
Prepaid expenses and other current assets | 44 | ||
Inventory | 662 | ||
PP&E | 4,860 | ||
Deposits | 2 | ||
Trademark | 280 | ||
Medicare license | 940 | ||
Hospital license | 13 | ||
Goodwill | 9,230 | ||
Net assets acquired | $ | 24,920 | |
Net liabilities acquired: | |||
Trade accounts payable | $ | 6,049 | |
Accrued liabilities | 3,198 | ||
Long-term portion of Capital Leases | 2,278 | ||
Long-term portion of Note Payable | 6,052 | ||
Total liabilities acquired | $ | 17,577 | |
Consideration: | |||
Cash, net of cash acquired | $ | 1,436 | |
Assumed note payable | 5,907 | ||
Total consideration | $ | 7,343 |
Victory Acquisition – Pro Forma Adjustments
(a) | Adjustments represent the allocation of the purchase price consideration reflecting the estimated fair value of the net assets acquired on April 24, 2015. | |
(b) | Cash paid at April 24, 2015 as part of the purchase price of Victory. | |
(c) | Debt assumed from Victory's parent at April 24, 2015 as part of the purchase price of Victory. Inter-company debt is eliminated in consolidation.. | |
(d) | To increase the carrying value of Victory's net property and equipment to its fair value, as was determined by an independent third party valuation expert. | |
(e) | Equity balances of Victory are eliminated. | |
(f) | Non-controlling interest was deemed to have a fair market value of $0. Prior to the acquisition, partnership equity was at a net deficit position. As such, the pro forma balance sheet includes no adjustments to non-controlling interest. | |
(g) | For the periods ended December 31, 2014 and March 31, 2015, Victory incurred expenses of $4.1 million and $0.3 million, respectively, for fees paid to their parent company for various management services pertaining to hospital operations. In conjunction with the acquisition, Victory entered into a Management Services Agreement ("MSA") with the Company to provide these same management services. Monthly MSA fees are determined based on a fixed percentage of cash collections. The management fee expenses and revenues are eliminated through consolidation with a remaining impact to non-controlling interest for the 45% of the entity which is not owned by Nobilis. The pre-existing management fees have been adjusted out of the pro forma and replaced with the monthly MSA fees. Incremental modifications have been made to the non-controlling interest balance of $1.1 million and $0.1 million for the periods ended December 31, 2014 and March 31, 2015, respectively, which were included as part of the non-controlling interest adjustment performed in note (i), as seen below. | |
(h) | To record additional depreciation expense as a result of the increase in property and equipment arising from the fair value adjustment described in note (d), as seen above. | |
(i) | To reflect non-controlling interest of the 45% minority ownership. This balance has been separately calculated and adjusted for each of the periods ended December 31, 2014 and March 31, 2015. |
(j) | This represents pre-acquisition revenue which the Company generated through their business relationship with Victory. Subsequent to the acquisition, such revenue is considered an inter-company transaction which is eliminated through consolidation and thus, has been adjusted out of the pro forma. |
Victory is taxed as a partnership for federal income tax purposes whereby all income and losses are to be included in the tax returns of the individual partners. As a partner with a 55% ownership interest, the Company has the ability to offset any tax implications with pre-existing net operating losses.