Exhibit 99.3
UNAUDITED PRO FORMA CONSOLDIATED FINANCIAL INFORMATION
The unaudited pro forma consolidated statements of income for the nine months
ended September 30, 2006 and the year ended December 31, 2005 give effect to
Almost Family, Inc.'s (the Company) acquisition of the home health assets of
Mederi, Inc. (Mederi) in an asset acquisition completed December 3, 2006, as if
the transaction had occurred at the beginning of the periods presented.
The unaudited pro forma consolidated balance sheet as of September 30, 2006,
gives effect to the acquisition as if the transaction had occurred on September
30, 2006.
The unaudited pro forma consolidated financial information should be read in
conjunction with the Company's historical consolidated financial statements and
accompanying notes. 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 Mederi's 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 Mederi 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 are based on certain assumptions that we believe are
reasonable and do 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 are they necessarily indicative of future consolidated
financial position or results of operations.
ALMOST FAMILY, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As of September 30, 2006
Mederi Pro forma Pro Forma
Historical Acquisition Adjustments Notes As Adjusted
------------------ ---------------- ---------------- ---------- ---------------
CURRENT ASSETS:
Cash and cash equivalents $ 5,111,467 $ 1,092,991 $ (1,092,991) (d) $ 5,111,467
Accounts receivable - net 11,368,707 3,622,489 - 14,991,196
Prepaid expenses and other current 1,150,678 299,793 - 1,450,471
Deferred tax assets 1,351,004 954,394 (954,394) (d) 1,351,004
------------------ ---------------- ---------------- ---------------
TOTAL CURRENT ASSETS 18,981,856 5,969,667 (2,047,385) 22,904,138
PROPERTY AND EQUIPMENT - net 1,299,622 227,430 - 1,527,052
INTANGIBLE ASSETS 12,405,173 - 24,790,080 (e) 37,195,253
DEFERRED TAX ASSETS 329,709 - - 329,709
OTHER ASSETS 172,901 45,021 - 217,922
------------------ ---------------- ---------------- ---------------
$ 33,189,261 6,242,118 $ 22,742,695 $ 62,174,074
================== ================ ================ ===============
CURRENT LIABILITIES:
Accounts payable $ 2,816,527 $ 752,722 $ - $ 3,569,249
Accrued liabilities 5,142,146 5,009,516 450,000 (f) 10,601,662
Current portion - debt and leases 905,134 3,408,808 (2,208,808) (g) 2,105,134
------------------ ---------------- ---------------- ---------------
TOTAL CURRENT LIABILITIES 8,863,807 9,171,046 (1,758,808) 16,276,045
------------------ ---------------- ---------------- ---------------
LONG-TERM LIABILITIES
Revolving credit facility - - 11,400,000 (h) 11,400,000
Capital leases 143,827 - - 143,827
Notes payable 640,000 - 4,000,000 (i) 4,640,000
Other liabilities 471,031 208,575 - 679,606
------------------ ---------------- ---------------- ---------------
TOTAL LONG-TERM LIABILITIES 1,254,858 208,575 15,400,000 16,863,433
------------------ ---------------- ---------------- ---------------
TOTAL LIABILITIES 10,118,665 9,379,621 13,641,192 33,139,478
------------------ ---------------- ---------------- ---------------
Stockholders' equity:
Common stock, par value $.10;
authorized 10,000,000 shares; 354,497 8,900 11,100 (c,j) 374,497
Treasury stock, at cost (8,200,095) - - (8,200,095)
Additional paid-in capital 27,248,713 44,500 5,899,500 (c,j) 33,192,713
Retained earnings (deficit) 3,667,481 (3,190,903) 3,190,903 (c,j) 3,667,481
------------------ ---------------- ---------------- ---------------
TOTAL STOCKHOLDERS' 23,070,596 (3,137,503) 9,101,503 29,034,596
EQUITY
------------------ ---------------- ---------------- ---------------
$ 33,189,261 $ 6,242,118 $ 22,742,695 $ 62,174,074
================== ================ ================ ===============
See notes to unaudited pro forma consolidated financial information
ALMOST FAMILY, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Nine Months Ended September 30, 2006
Almost Family Mederi Pro forma Notes Pro Forma
Adjustments As Adjusted
---------------- -------------- -------------- ---------- -------------------
Net service revenues $ 65,586,220 $ 18,713,448 $ - $ 84,299,668
Cost of service revenue 33,954,893 9,495,278 - 43,450,171
---------------- -------------- -------------- -------------------
Gross margin 31,631,327 9,218,170 - 40,849,497
General and administrative expenses
Salaries and benefits 17,734,629 6,631,682 - 24,366,311
Other 9,211,719 2,363,830 - 11,575,549
---------------- -------------- -------------- -------------------
Total general and administrative 26,946,348 8,995,512 - 35,941,860
---------------- -------------- -------------- -------------------
4,684,979 222,658 4,907,637
Operating income (loss) Other income (expense):
Interest income (expense) 94,220 (567,119) (241,381) (a) (714,280)
---------------- -------------- -------------- -------------------
Income (loss) from continuing operations
before income taxes 4,779,199 (344,461) (241,381) 4,193,357
Provision (benefit) for income taxes 1,901,259 (134,270) (98,790) (b) 1,668,199
---------------- -------------- -------------- -------------------
Income (loss) from continuing $ 2,877,940 $ (210,191) $ (142,591) $ 2,525,158
================ ============== ============== ===================
Per share amounts-Basic: 4,829,744 200,000 (c) 5,029,744
Average shares outstanding
Income from continuing operations $ 0.60 $ 0.50
================ ===================
Per share amounts-Diluted:
Average shares outstanding 5,325,084 200,000 (c) 5,525,084
Income from continuing operations $ 0.54 $ 0.46
================ ===================
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, 2005
Pro forma Pro Forma
Almost Family Mederi Adjustments Notes As Adjusted
---------------- -------------- --------------- ---------- -------------------
Net service revenues $ 75,620,145 $23,379,396 $ - $ 98,999,541
Cost of service revenue 39,662,307 12,231,161 51,893,468
---------------- -------------- --------------- -------------------
Gross margin 35,957,838 - 47,106,073
11,148,235
General and administrative expenses
-
Salaries and benefits 19,982,774 7,764,154 27,746,928
-
Other 11,885,012 3,503,654 15,388,666
---------------- -------------- --------------- -------------------
-
Total general and administrative 31,867,786 11,267,808 43,135,594
---------------- -------------- --------------- -------------------
4,090,052 (119,573) - 3,970,479
Operating income (loss)
Other income (expense):
Interest expense (112,608) (82,430) (995,570) (a) (1,190,608)
Litigation gain 267,426 - - 267,426
---------------- -------------- --------------- -------------------
Income (loss) from continuing
operations before income taxes 4,244,870 (202,003) (995,570) 3,047,297
Provision (benefit) for income taxes 1,361,582 (78,740) (388,272) (b) 894,570
---------------- -------------- --------------- -------------------
Income (loss) from continuing
operations $ 2,883,288 $ (123,263) $ (607,298) $ 2,152,727
================ ============== =============== ===================
Per share amounts-Basic: 4,674,578 200,000 (c) 4,874,578
Average shares outstanding
Income from continuing operations $ 0.62 $ 0.44
================ ===================
Per share amounts-Diluted:
Average shares outstanding 5,218,658 200,000 (c) 5,418,658
Income from continuing operations $ 0.55 $ 0.40
================ ===================
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.
NOTE 2 - PRO FORMA ADJUSTMENTS
The following pro forma adjustments are reflected in the accompanying unaudited
pro forma consolidated financial information:
(a) To record the pro forma interest expense on funds borrowed to
finance the acquisition.
(b) To record the pro forma provision for income taxes based on pro
forma pretax income (loss) based upon each period's consolidated
combined state and Federal effective tax rate.
(c) To reflect shares of the Company's common stock issued to the
sellers.
(d) To remove assets retained by the seller.
(e) To record anticipated intangible assets based on the Company's
preliminary purchase price allocation. The purchase price has not
been allocated to specific intangible assets in the unaudited pro
forma consolidated balance sheet (and there is no corresponding
amortization expense recorded) because the company is in the
process of determining the fair vale of such assets. The final
purchase price allocation will be completed after asset and
liability valuations are finalized.
(f) To record estimated transaction costs and fees incurred in
completion of the transaction.
(g) To remove specific debt instruments not assumed by the buyer.
(h) To record advances made on the Company's revolving credit facility
to fund the cash portion of the purchase price.
(i) To record the issuance of notes payable to the seller.
(j) To eliminate the shareholders equity section of the sellers'
balance sheet.
NOTE 3 - ADDITIONAL INFORMATION
The pro forma adjustments reflected in the accompanying unaudited pro forma
financial information and outlined in Note 2 reflect only those permissible
under the rules and regulation of the U.S. Securities and Exchange Commission.
As previously disclosed by the Company when the transaction was announced, the
Company's plans for integrating the acquired operations are as follows:
o combination of eight Mederi locations with Almost Family locations in
overlapping service territories; and
o elimination of substantially all of Mederi's Miami FL corporate office
overhead with relatively small corresponding additions to Almost
Family's Louisville KY corporate office overhead.
With these two steps, the Company expects to eliminate approximately $850,000 of
operating expenses net of additional corporate management expenses annually.
As indicated in Note 12 to the accompanying audited financial statements of
Mederi, Inc., Mederi's corporate overhead expenses, exclusive of interest
expense were approximately $3.1 million and $2.4 million for the years ended
June 30, 2006 and 2005, respectively.
Additional consideration of up to $5.5 million in cash may be paid to the seller
contingent primarily upon the achievement of certain revenue targets in the two
years following the closing. No accrual has been provided in the unaudited pro
forma financial information.