SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
November 17, 2000
Date of Report (Date of earliest event reported)
ADAC LABORATORIES
(Exact name of registrant as specified in its charter)
California 0-9428 94-1725806
- ------------------------------- ------------------------ -------------------
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
540 Alder Drive
Milpitas, California 95035
(Address of principal executive offices)
(408) 321-9100
(Registrant's telephone number, including area code)
ADAC Laboratories, a California corporation ("ADAC") hereby amends the
following items, financial statements, exhibits, or other portions of its
Current Report on Form 8-K, originally filed with the Securities and Exchange
Commission on December 1, 2000 as set forth below:
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBIT C.
(b) Pro Forma Financial Information
ADAC LABORATORIES AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma consolidated financial statements of ADAC Laboratories
and Subsidiaries ("ADAC") set forth below consist of the unaudited pro forma
consolidated balance sheet as of July 2, 2000 and the unaudited pro forma
consolidated statements of operations for the nine months ended July 2, 2000 and
for the years ended October 3, 1999, September 27, 1998 and September 28, 1997.
The unaudited pro forma consolidated balance sheet was prepared to give effect
to the disposition of ADAC HealthCare Systems, Inc. ("HCIS"), including the
cardiology business unit, as if it had occurred on July 2, 2000. The unaudited
pro forma consolidated statements of operations were prepared to give effect to
the disposition of HCIS, including the cardiology business unit, as if it had
occurred on September 30, 1996. The unaudited pro forma consolidated balance
sheet presented below does not purport to represent what ADAC's financial
position actually would have been had the disposition of HCIS, including the
cardiology business unit, occurred on the date indicated or to project ADAC's
financial position for any future period. The unaudited pro forma consolidated
statements of operations set forth below do not purport to represent what ADAC's
operations actually would have been or to project ADAC's operating results for
any future period. The unaudited pro forma adjustments are based upon currently
available information and certain assumptions that ADAC believes are reasonable.
The unaudited pro forma consolidated financial statements should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations " and the historical consolidated financial statements
contained in ADAC's Quarterly Report on Form 10-Q as of July 2, 2000 and the
1999 Annual Report on Form 10-K as of October 3, 1999.
The unaudited pro forma consolidated financial statements have been prepared in
accordance with the rules and regulations of the Securities and Exchange
Commission and are presented for illustrative purposes only. Such information is
not necessarily indicative of the operating results or financial position that
would have occurred if the disposition had been consummated on July 2, 2000 or
September 30, 1996, respectively, nor is it necessarily indicative of future
operating results or financial position.
ADAC LABORATORIES AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JULY 2, 2000
(AMOUNTS IN THOUSANDS)
LESS:
ADJUSTMENTS
ADAC FOR PRO FORMA ADAC
HISTORICAL DISPOSITION(1) ADJUSTMENTS PRO FORMA
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 8,632 $ (162) $ -- $ 8,794
Trade receivables, net 82,442 8,573 73,869
Tax and other receivables 3,136 24 3,112
Inventories, net 28,938 161 28,777
Prepaid expenses and other current assets 6,132 1,714 1,143 (4) 5,561
Current deferred income taxes 13,717 -- 2,779 (2) 16,496
--------- --------- --------- ---------
TOTAL CURRENT ASSETS 142,997 10,310 3,922 136,609
Service parts, net 19,062 23 19,039
Fixed assets, net 16,926 1,494 15,432
Capitalized software, net 22,158 6,803 15,355
Intangibles, net 38,664 11,846 26,818
Deferred income taxes 1,528 (1,741) 3,269
Other assets, net 1,659 -- 1,300 (4) 2,959
--------- --------- --------- ---------
TOTAL ASSETS $ 242,994 $ 28,735 $ 5,222 $ 219,481
========= ========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable to banks $ 38,891 $ -- $ (4,034)(3) $ 34,857
Accounts payable 24,649 2,053 811 (5) 23,407
Deferred revenues 18,718 3,787 14,931
Accrued compensation 12,829 1,582 11,247
Customer deposits and advances 6,531 209 6,322
Warranty and installation 5,956 215 5,741
Other accrued liabilities 17,406 2,435 14,971
--------- --------- --------- ---------
TOTAL CURRENT LIABILITIES 124,980 10,281 (3,223) 111,476
Non-current liabilities 3,515 261 3,254
--------- --------- --------- ---------
TOTAL LIABILITIES 128,495 10,542 (3,223) 114,730
--------- --------- --------- ---------
SHAREHOLDERS' EQUITY:
Preferred stock, no par value:
Authorized: 5,000 shares; issued and outstanding: none -- -- -- --
Common stock, no par value:
Authorized: 50,000 shares; issued and outstanding: 20,938
shares as of July 2, 2000 159,141 37,076 35,773 (6) 157,838
Accumulated deficit (40,625) (18,883) (27,328)(6) (49,070)
Accumulated other comprehensive loss (4,017) -- (4,017)
--------- --------- --------- ---------
TOTAL SHAREHOLDERS' EQUITY 114,499 18,193 8,445 (6) 104,751
--------- --------- --------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 242,994 $ 28,735 $ 5,222 $ 219,481
========= ========= ========= =========
See accompanying notes to the unaudited pro forma consolidated financial
statements.
ADAC LABORATORIES AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED JULY 2, 2000
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
LESS:
ADJUSTMENTS
ADAC FOR PRO FORMA ADAC
HISTORICAL DISPOSITION(7) ADJUSTMENTS PRO FORMA
REVENUES, NET:
Product $197,359 $ 14,444 $ -- $182,915
Service 70,286 9,596 60,690
-------- -------- -------- --------
267,645 24,040 -- 243,605
-------- -------- -------- --------
COST OF REVENUES:
Product 117,864 9,988 107,876
Service 49,288 4,824 44,464
-------- -------- -------- --------
167,152 14,812 -- 152,340
-------- -------- -------- --------
Gross profit 100,493 9,228 -- 91,265
-------- -------- -------- --------
OPERATING EXPENSE:
Marketing and sales 42,577 4,794 37,783
Research and development 14,085 2,554 11,531
General and administrative 23,848 4,187 19,661
Goodwill amortization 1,534 789 745
Settlement of litigation and related charges 10,340 -- 10,340
-------- -------- -------- --------
92,384 12,324 -- 80,060
-------- -------- -------- --------
Operating income (loss) 8,109 (3,096) -- 11,205
OTHER EXPENSE:
Interest and other (income) expense, net 3,091 (503) 3,594
-------- -------- -------- --------
Income (loss) before provision (benefit) for income taxes 5,018 (2,593) -- 7,611
Provision (benefit) for income taxes 1,757 (935) 2,692
-------- -------- -------- --------
NET INCOME (LOSS) $ 3,261 $ (1,658) $ -- $ 4,919
======== ======== ======== ========
Net income per share:
Basic $ 0.16 $ 0.24
Diluted $ 0.15 $ 0.23
Number of shares used in per share calculations:
Basic 20,649 20,649
Diluted 21,284 21,284
See accompanying notes to the unaudited pro forma consolidated financial
statements.
ADAC LABORATORIES AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 3, 1999
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
LESS:
ADJUSTMENTS
ADAC FOR PRO FORMA ADAC
HISTORICAL DISPOSITION(7) ADJUSTMENTS PRO FORMA
REVENUES, NET:
Product $ 244,274 $ 22,531 $ -- $ 221,743
Service 97,857 15,163 82,694
--------- --------- --------- ---------
342,131 37,694 -- 304,437
--------- --------- --------- ---------
COST OF REVENUES:
Product 171,246 13,152 158,094
Service 68,522 7,143 61,379
--------- --------- --------- ---------
239,768 20,295 -- 219,473
--------- --------- --------- ---------
Gross profit 102,363 17,399 -- 84,964
--------- --------- --------- ---------
OPERATING EXPENSE:
Marketing and sales 62,387 6,952 55,435
Research and development 18,188 3,201 14,987
General and administrative 53,570 4,585 48,985
Goodwill amortization 1,951 1,408 543
Acquired in-process research and development 1,407 -- 1,407
Restructuring charges 4,024 -- 4,024
--------- --------- --------- ---------
141,527 16,146 -- 125,381
--------- --------- --------- ---------
Operating income (loss) (39,164) 1,253 -- (40,417)
OTHER EXPENSE:
Interest and other (income) expense, net 4,501 (539) 5,040
--------- --------- --------- ---------
Income (loss) before provision (benefit) for income taxes (43,665) 1,792 -- (45,457)
Provision (benefit) for income taxes (10,045) 298 (10,343)
--------- --------- --------- ---------
NET INCOME (LOSS) $ (33,620) $ 1,494 $ -- $ (35,114)
========= ========= ========= =========
Net loss per share:
Basic $ (1.64) $ (1.72)
Diluted $ (1.64) $ (1.72)
Number of shares used in per share calculations:
Basic 20,466 20,466
Diluted 20,466 20,466
See accompanying notes to the unaudited pro forma consolidated
financial statements.
ADAC LABORATORIES AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 27, 1998
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
LESS:
ADJUSTMENTS
ADAC FOR PRO FORMA ADAC
HISTORICAL DISPOSITION(7) ADJUSTMENTS PRO FORMA
REVENUES, NET:
Product $ 219,046 $ 22,071 $ -- $ 196,975
Service 81,482 16,554 64,928
--------- --------- --------- ---------
300,528 38,625 -- 261,903
--------- --------- --------- ---------
COST OF REVENUES:
Product 124,113 12,912 111,201
Service 54,923 8,424 46,499
Discontinued product 13,661 11,311 2,350
--------- --------- --------- ---------
192,697 32,647 -- 160,050
--------- --------- --------- ---------
Gross profit 107,831 5,978 -- 101,853
--------- --------- --------- ---------
OPERATING EXPENSE:
Marketing and sales 49,637 5,243 44,394
Research and development 16,836 4,267 12,569
General and administrative 19,537 4,098 15,439
Goodwill amortization 2,165 1,492 673
Discontinued Products 1,910 -- 1,910
Acquisition expense write-off 1,300 -- 1,300
--------- --------- --------- ---------
91,385 15,100 -- 76,285
--------- --------- --------- ---------
Operating income (loss) 16,446 (9,122) -- 25,568
OTHER EXPENSE:
Interest and other (income) expense, net 4,338 173 (198)(8) 3,967
--------- --------- --------- ---------
Income (loss) before provision (benefit) for income taxes 12,108 (9,295) 198 21,601
Provision (benefit) for income taxes 4,722 (3,625) 77(9) 8,424
--------- --------- --------- ---------
NET INCOME (LOSS) $ 7,386 $ (5,670) $ 121 $ 13,177
========= ========= ========= =========
Net income per share:
Basic $ 0.38 $ 0.68
Diluted $ 0.36 $ 0.65
Number of shares used in per share calculations:
Basic 19,500 19,500
Diluted 20,387 20,387
See accompanying notes to the unaudited pro forma consolidated financial
statements.
ADAC LABORATORIES AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 28, 1997
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
LESS:
ADJUSTMENTS
ADAC FOR PRO FORMA ADAC
HISTORICAL DISPOSITION(1) ADJUSTMENTS PRO FORMA
REVENUES, NET:
Product $ 194,238 $ 12,726 $ -- $ 181,512
Service 69,649 15,546 54,103
--------- --------- --------- ---------
263,887 28,272 -- 235,615
--------- --------- --------- ---------
COST OF REVENUES:
Product 114,639 8,543 106,096
Service 45,463 8,223 37,240
Discontinued product -- --
160,102 16,766 -- 143,336
--------- --------- --------- ---------
Gross profit 103,785 11,506 -- 92,279
--------- --------- --------- ---------
OPERATING EXPENSE:
Marketing and sales 41,570 4,026 37,544
Research and development 16,728 5,289 11,439
General and administrative 15,930 4,879 11,051
Goodwill amortization 1,015 856 159
Discontinued products 531 531 --
Acquisition expense write-off 651 651
--------- --------- --------- ---------
76,425 15,581 -- 60,844
--------- --------- --------- ---------
Operating income (loss) 27,360 (4,075) -- 31,435
OTHER EXPENSE:
Interest and other (income) expense, net 5,271 1,507 (439)(8) 3,325
--------- --------- --------- ---------
Income (loss) before provision (benefit) for income taxes 22,089 (5,582) 439 28,110
Provision (benefit) for income taxes 8,615 (2,177) 171(9) 10,963
--------- --------- --------- ---------
NET INCOME (LOSS) $ 13,474 $ (3,405) $ 268 $ 17,147
========= ========= ========= =========
Net income per share:
Basic $ 0.73 $ 0.93
Diluted $ 0.69 $ 0.88
Number of shares used in per share calculations:
Basic 18,419 18,419
Diluted 19,534 19,534
See accompanying notes to the unaudited pro forma consolidated financial
statements.
ADAC LABORATORIES AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1-BASIS OF PRESENTATION:
On October 24, 2000, ADAC Laboratories, a California corporation ("ADAC")
entered into an agreement and Plan Merger ("Merger Agreement") by and among
ADAC, ADAC HealthCare Information Systems, Inc., a Texas corporation and
wholly-owned subsidiary of ADAC ("HCIS"), Cerner Corporation, a Delaware
corporation ("Cerner") and Cerner RIS Acquisition Corporation, a Delaware
corporation and wholly-owned subsidiary of Cerner ("Acquisition Sub") pursuant
to which Acquisition Sub will merge with and into HCIS (the "Merger"), as is
more fully described in the Merger Agreement.
On October 10, 2000, prior to the agreement with Cerner, ADAC entered into an
agreement with Camtronics, LTD, ("Camtronics"), a Wisconsin corporation to sell
certain assets comprising the cardiology business unit of HCIS.
On November 8, 2000, all conditions to the closing of the sale of the cardiology
business unit were satisfied and this transaction was closed. Camtronics will
pay a total of approximately $0.7 million cash consideration for the assets
comprising the cardiology business unit of HCIS, of which approximately $0.2
million was paid at closing, $0.1 million is to be paid on November 8, 2001 and
the remaining $0.3 million is to be paid on November 8, 2002, subject to
adjustment.
On November 17, 2000, all conditions to the closing of the sale of HCIS were
satisfied and the Merger was closed. Cerner will pay a total of approximately $6
million cash consideration for the shares of HCIS, of which approximately $4
million was paid at closing, $1 million is to be paid on November 17, 2001 and
the remaining $1 million is to be paid on November 17, 2002, subject to
adjustment.
HCIS is located in Houston, Texas and provides information and image management
solutions for radiology departments of healthcare facilities. Cerner designs,
develops and supports information systems and content solutions for health
organizations and consumers.
The unaudited pro forma consolidated financial statements presented are not
necessarily indicative of future results of operations of ADAC which would have
resulted had the disposition taken place during the periods reported. The
unaudited pro forma consolidated balance sheet presents the consolidated
financial position of ADAC assuming the disposition of HCIS, including the
cardiology business unit had been consummated on July 2, 2000. The unaudited pro
forma consolidated statements of operations for the nine months ended July 2,
2000 and for the years ended October 3, 1999, September 27, 1998 and September
28, 1997, present the consolidated results of operations of ADAC assuming that
the disposition had been consummated as of September 30, 1996.
The Unaudited pro forma consolidated statements of operations exclude the
effects of the loss on sale and the related charges incurred in connection with
the disposition of HCIS, including the cardiology business unit. These amounts
are reflected as charges to the accumulated deficit in the unaudited pro forma
consolidated balance sheet.
NOTE 2-INCOME (LOSS) PER SHARE:
Basic net income (loss) per share has been computed using the weighted average
number of common stock shares outstanding. Diluted net income (loss) per share
includes the effect of common stock options and warrants using the treasury
stock method, if dilutive.
The calculation of basic and diluted net income (loss) per share is as follows:
Nine Months Fiscal Year Ended
Ended --------------------------------------------------------
($000, except per share data) July 2, 2000 October 3, 1999 September 27, 1998 September 28, 1997
- ----------------------------- ------------ --------------- ------------------ ------------------
Basic EPS:
Net income (loss) $ 3,261 $(33,620) $ 7,386 $ 13,474
Weighted Average common shares outstanding 20,649 20,466 19,500 18,419
Basic net income (loss) per share $ 0.16 $ (1.64) $ .38 $ .73
Diluted EPS:
Net income (loss) $ 3,261 $(33,620) $ 7,386 $ 13,474
Weighted average common shares outstanding 20,649 20,466 19,500 18,419
Options and warrants 635 -- 887 1,115
-------- -------- -------- --------
Total shares 21,284 20,466 20,387 19,534
-------- -------- -------- --------
Diluted net income (loss) per share $ .15 $ (1.64) $ .36 $ .69
If the Company had reported net income in fiscal year 1999, total diluted shares
would have been increased by shares for $284,000 options.
NOTE 3-PRO FORMA ADJUSTMENTS:
Consolidated Balance Sheet
The following notes describe the historical and pro forma adjustments found on
the accompanying unaudited pro forma consolidated balance sheet.
(1) The amounts included in the Disposition column reflect the assets and
liabilities involved in the transactions.
(2) To record the tax benefit associated with the loss on disposition.
(3) Reflects the cash proceeds from the disposition of HCIS, including the
cardiology business unit. The Company intends to use the pre-tax cash
proceeds from the sales as an immediate reduction in short-term debt.
(4) Reflects the present value of notes receivable from the disposition of
HCIS, including the cardiology business unit discounted at the Company's
external cost of funds rate of 8.63%.
(5) Reflects the accrued transaction costs and net liabilities of the
cardiology business unit retained by ADAC.
(6) To record the loss on disposition of $13.5 million, net of an income tax
benefit of $5.1 million.
Consolidated Statements of Operations
The following notes describe the historical and pro forma adjustments found on
the accompanying unaudited pro forma consolidated statements of operations.
(7) The amounts included in the Disposition column on the consolidated
statements of operations reflect the HCIS business, including the
cardiology business unit disposed of.
(8) Reflects the reduction in interest expense and addition of interest income,
as a result of the $4 million of the proceeds from the sales being used to
reduce short-term debt. The reduction in interest expense was calculated
using the Company's external cost of funds rate of 8.63%.
(9) The adjustment for income taxes is based upon statutory income tax rates.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ADAC LABORATORIES
Dated: December 11, 2000
By: /s/ Andrew Eckert
-------------------------
Andrew Eckert
Chief Executive Officer